Riverside General Hospital: Bought Referrals and Care on Paper

Riverside General Hospital submitted $160,336,451 in partial hospitalization program bills and Medicare paid $46,753,180, according to the court’s account of the criminal case. The fraud involved bought referrals, patients who did not qualify for intensive psychiatric treatment, and bills for care they never received. The prosecution reached the Houston hospital’s president, satellite operators, recruiters and clinical staff.

The Justice Department’s account of the leadership trial described the scheme running from 2005 through June 2012. Patients rarely saw a psychiatrist. Some had Alzheimer’s disease and could not actively participate in the intensive treatment Medicare was being billed for. The patients went without the billed care. Taxpayers paid for it.

For someone who worked in admissions, patient care or billing, the telling detail is how those jobs connected: a referral brought the patient in, paperwork made the patient appear eligible, and the claim described treatment that had not happened.

What Medicare Was Paying a PHP to Provide

A partial hospitalization program provides intensive outpatient psychiatric treatment. In Riverside’s case, Medicare paid for a level of care that required a qualifying patient, an individualized treatment plan and active treatment under a physician’s care.

The court’s account of the rules governing the criminal case described patients needing treatment comparable to inpatient care and having the capacity to participate in the program. Active treatment was required at least four days and twenty hours a week. The program had to discharge a patient whose condition improved or stabilized, or who could not benefit from its intensive treatment.

The location also mattered. Under the historical requirements described by the court, an offsite program needed a licensed physician physically present in the office suite and immediately available while staff provided services. A physician’s name on the chart could not supply the missing presence in the room.

Riverside’s criminal cases showed how false admissions and signatures could keep the billing moving when the care was missing.

How Riverside Bought Its Patient Flow

The hospital president and the operator of Devotions Care Solutions paid recruiters to bring in Medicare beneficiaries who did not qualify for partial hospitalization treatment, according to the leadership trial evidence. The president also paid owners and operators of group care homes. Devotions was a Riverside satellite psychiatric facility, and its operator was the president’s son.

Safe and Sound’s owner occupied another position in that chain. The Justice Department identified her as both a group-home owner and a patient-file auditor. The residential setting, the referral and the paperwork were connected through someone who worked on both sides of the patient transfer.

The court’s description of a recruiter’s testimony makes the payment condition plain. At Devotions, she received kickbacks per patient, and the operator told her she would be paid only if the referred patient was admitted. Another recruiter testified that he received cash for bringing patients to the program.

Admission triggered the recruiter’s payment. The program then billed Medicare. The trial evidence also showed Devotions recycling former patients so their benefits would pay again. We see the same patient being made valuable at entry and again at readmission, while the treatment that justified either decision went missing.

When the Billing Outran the Care

Patients sat watching movies instead of receiving treatment, according to the Justice Department’s account of the leadership trial. The court’s account of Devotions trial evidence described beneficiaries largely recruited from assisted living facilities. Its operator paid them in cigarettes, food and coupons redeemable at Riverside’s convenience stores.

Devotions billed for patients who did not attend, and its operator directed staff to distinguish between patients likely to notice and those unlikely to challenge the bill. That account came from an office manager’s testimony, reproduced in the criminal court’s opinion.

She testified that the operator told her not to bill absent patients who could read their Medicare bills or whose families were heavily involved in their care. He instructed her to bill residents of care homes and nursing homes whether they attended or not. We see a billing policy built around who was least likely to catch it.

The same court account described a supervising physician coming to Devotions no more than once a week, spending only three to six hours there. Patients complained about rarely seeing a physician, delayed medication and understaffing. The physician backdated signatures and did not review the files he signed. An office manager testified that she raised the physician’s absence with the operator, who said he would contact the physician. Nothing changed.

The concern had reached management. The signatures still appeared. The people working in that office could see both the missing care and the paperwork used to bill for it.

The Same Gap in Other Hospitals’ Complaints

A separate whistleblower complaint against Universal Health Services alleged that its partial hospitalization programs filled patients’ days with free time and movies, using cigarettes, medications and hygiene products to secure their cooperation. It also alleged a striking mismatch between the number of assessments and the time available:

In a different complaint against Havenwyck Holdings, the whistleblowers alleged that advance notice of an audit prompted staff to manufacture support for decisions already made:

These are allegations in other hospitals’ cases. They show why the history of a treatment record matters alongside its finished appearance: when someone assessed the patient, what staff actually did, and when the paperwork acquired the account presented to the payer.

The Psychiatrist’s Signatures Behind Riverside’s Claims

A separate criminal prosecution showed how a Riverside attending psychiatrist supported the hospital’s billing and submitted false claims of his own. According to the Justice Department’s account of his trial, he repeatedly admitted and readmitted patients who could not participate in the treatment, including people with severe Alzheimer’s disease or dementia.

The trial evidence showed that his signatures enabled more than $55 million in false Riverside claims. The Justice Department described what the paperwork concealed:

The same trial evidence showed that he personally billed Medicare for psychiatric treatment he never provided. His role therefore reached both the hospital’s program claims and his own professional claims.

A jury convicted the psychiatrist of conspiracy and health care fraud on May 23, 2017. The prosecution established what the signatures did inside this operation: they supplied false clinical support for repeated admissions and for treatment the patients had not received.

What the Leadership Trial Established

The court’s account described the hospital president repeatedly certifying to Medicare that Riverside’s partial hospitalization programs complied with its rules. Those certifications sat above the false claims moving through the hospital and its satellites.

On October 20, 2014, a jury convicted the hospital president, the Devotions operator and the group-home owner of health care fraud conspiracy and kickback offenses. A patient recruiter was also convicted of a kickback conspiracy.

The assistant administrator who managed many Riverside partial hospitalization programs pleaded guilty to health care fraud conspiracy and kickback offenses. Another satellite operator and other participants in referral payments also pleaded guilty. The hospital’s leadership, clinical work, patient recruitment and referral payments supplied different parts of the scheme.

The FBI and the Department of Health and Human Services Office of Inspector General were among the agencies that investigated the leadership case.

What Evidence Is Needed to Prove Fraud?

Our whistleblower experts work with you to assess how patient eligibility, actual treatment and the claims connect in a potential partial hospitalization fraud case. Riverside makes those connections concrete: an admission tied to a recruiter’s payment, an absent patient billed as present, a physician’s backdated signature, and an office manager’s warning that reached the operator.

Different workers see different parts of that chain. Admissions staff may know where a referral came from and what was promised for it. Clinical staff may know whether the patient could participate and what treatment occurred. Billing and office staff may know whose instructions overrode attendance or supplied missing paperwork. We work with you to connect that knowledge to the government claims and the people directing them.

For someone considering a civil whistleblower case, the False Claims Act can pay 15 to 30 percent of what the government recovers.

You Saw What the Program Delivered

If you know who bought the referrals, who signed the charts or which billed treatment never happened, talk with our whistleblower experts about the PHP operation you know. We build the case with you around those decisions, pair you with behavioral healthcare fraud whistleblower lawyers, and stay beside you as the case moves forward.