Atrium Health and CEO indicted in $407M healthcare fraud scheme
The former CEO of Atrium Health and Senior Living and the company itself have been charged in a scheme to defraud Medicare and Medicaid for approximately $407 million.
Kevin Breslin, 56, of Hoboken, New Jersey, and KBWB Operations, LLC, doing business as Atrium Health and Senior Living, were indicted by a federal grand jury in the Western District of Wisconsin. Atrium Health and Senior Living operates 24 nursing homes in Wisconsin and nine assisted living facilities in Wisconsin and Michigan, where Breslin was the CEO. The indictment alleges the scheme ran from January 2015 to September 2018 and charges the defendants with healthcare fraud, six counts of wire fraud, three counts of mail fraud, conspiracy to commit tax fraud and conspiracy to commit money laundering.
Over that time period, Atrium billed Medicare for over $189,000,000 and received over $49,000,000 and then billed Medicaid for over $218,000,000 and received over $93,000,000, according to the feds. The scheme covers a range of wrongdoing by Atrium Health, spearheaded by Breslin, including allegedly cheating employees, healthcare fraud and providing inadequate care to residents.
Allegedly, the company obtained funds from Medicare and Medicaid, certifying that they would follow all required quality of care standards, but did not. Additionally, they certified they would operate their facilities with adequate staffing, supplies and services, but they did not, the indictment alleges.
Breslin and Atrium also allegedly diverted the funds from the Wisconsin skilled nursing facilities to Atrium owners, guaranteed monthly return-on-investment payments to investors that were financing the construction of skilled nursing facilities in New Jersey, as well as construction costs for the New Jersey facilities, according to the indictment. Diverting the funds allegedly affected the quality of care provided to residents of the facilities, including Atrium providing “a shortage of clean diapers, inadequate wound care supplies, inadequate cleaning supplies and a lack of durable medical equipment and respiratory supplies,” the Department of Justice said in its indictment.
In addition, Atrium didn’t pay its vendors, resulting in numerous services to be cut off to the facilities––physical therapy for residents, fire alarm monitoring services, phone and internet services preventing staff from obtaining prescription orders and accessing electronic medical records systems, and necessary repairs and maintenance of the physical plant facilities.
Breslin and Atrium also allegedly did further harm to its own employees by withholding insurance premiums from their paychecks without actually paying the third-party administrator, which caused payment of employees’ health claims to be stopped. Breslin and Atrium also withheld 401(k) retirement savings account contributions from employees’ paychecks but didn’t pay the third-party pension administrator those monies, the indictment alleges. The defendants did the same when it came to employees’ taxes withheld from employees’ paychecks.
“If convicted, Breslin and Atrium face penalties of five years in federal prison on the conspiracy to commit tax fraud charge, and 20 years on each health care fraud, wire fraud, mail fraud, and conspiracy to commit money laundering charge,” the indictment stated. “The conspiracy to commit tax fraud charge and each of the health care, wire and mail fraud charges carry a $250,000 fine; the money laundering charge carries a $500,000 fine.”
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."