Five Arrested in Sham Hospice Scheme Feds Alleged Bilked Medicare Out of $15 Million

Five people have been arrested in Los Angeles on healthcare fraud charges relating to their alleged roles in a four-year-long sham hospice scheme that is said to have cost the Medicare program $15 million.

The Indictment

According to the indictment, three of the defendants – Petros Fichidzhyan, 43, of Granada Hills, Calif., Juan Carlos Esparza, 32, of Valley Village, Calif., and Karpis Srapyan, 34, of Van Nuys, Calif. – allegedly operated several sham hospice companies that were purportedly owned by foreign nationals. In reality, the three defendants had stolen the foreign nationals’ identities and owned the sham hospice companies themselves.

Two others, identified in the indictment as Susanna Harutyunyan and her husband Mihran Panosyan, aka Mike Hope, are alleged to have worked with the other defendants to launder the money.

Using Stolen Identities

The defendants allegedly used the names and Social Security numbers of Russian and Ukrainian citizens who once lived in the U.S. to open bank accounts, sign property leases, and, in Fichidzhyan’s case, to make phone calls to Medicare and submitted false and fraudulent claims to Medicare for hospice services.

In submitting the false claims, the defendants allegedly stole the identifying information of doctors, including one who was deceased, claiming to Medicare that the doctors had determined hospice services were necessary. In reality, those identified as receiving hospice services were not terminally ill and had never requested nor received care from the sham hospices. In some instances, the defendants falsely claimed that the same beneficiary received services from multiple sham hospices.

It’s alleged they used the money to purchase real estate and cars, among other things.

The Charges

Fichidzhyan, Esparza, and Srapyan are charged with conspiracy to commit healthcare fraud and aggravated identity theft. Fichidzhyan and Esparza also are charged with healthcare fraud. All five of the defendants are charged with conspiracy to launder money and money laundering. Fichidzhyan is further charged with making false statements.

If convicted, all five defendants face a maximum penalty of at least 40 years in prison. Fichidzhyan, Esparza, and Srapyan face another mandatory minimum of two years in prison on the aggravated identity theft count.

Part of Ongoing Hospice Fraud Crackdown

The charges are the most recent in the Justice Department’s ongoing effort to combat hospice fraud in the greater Los Angeles area.

Last August, the Centers for Medicare & Medicaid announced that it had embarked on a nationwide hospice site visit project, making unannounced site visits to every Medicare-enrolled hospice.

“Our goal was to protect patients and their families from engaging with fraudulent actors by making sure that each hospice is operational at the address listed on their enrollment form. If a hospice was not operational at the address listed on their Medicare enrollment form, CMS exercised its authority to either deactivate or revoke the hospice’s Medicare billing privileges. As of mid-August, CMS has visited over 7,000 hospices,” CMS stated.

It found nearly 400 hospices that faced the prospect of having their Medicare licenses deactivated or revoked.

CMS is Cracking Down

At the same time, CMS said it was initiating a pilot project to review hospice claims following patient’s first 90 days of hospice care.

“Doing this earlier during a patient’s length of stay will help inform future medical review activities aimed at determining whether hospices are submitting claims to Medicare for patients that are eligible for the benefit,” the agency stated.

Lawmakers Want Change

In May, Texas Rep. Beth Van Duyne and several other lawmakers wrote to CMS Administrator Chiquita Brooks-LaSure, urging CMS to further address issues relating to hospice fraud.

She acknowledged the steps that had been taken, but added “we are deeply concerned by new reports indicating many potentially fraudulent hospices are continuing to bill Medicare and CMS is still enrolling suspicious new providers into the program.”

According to a story in ProPublica, seven out of ten of the largest hospices in the U.S. have been sued at least once under the federal False Claims Act, which governs Medicare fraud. In 2021 alone, the government recovered more than $1.6 billion from FCA lawsuits filed against hospice care facilities.

How We Can Assist

Because hospice fraud is prosecuted as a federal felony, simply being accused can cost you time, money and the prospect of going to jail.

With increased scrutiny of the hospice industry, operators should make sure they are in compliance with all rules and laws. And if you find yourself the target of an investigation, having an experienced healthcare lawyer on your side is imperative.

Contact us for additional information at 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.