Four Healthcare Executives Sentenced in $198M Healthcare Fraud Scheme

A blue door with two small holes in it.

The U.S. Attorney’s Office for the Southern District of Texas recently announced that four healthcare executives have been sentenced for their involvement in a $189 million healthcare fraud scheme.

Defendants: Bobby Rouse, 81, received 120 months; David Edson, 72, received 48 months, Steven House worth, 47, and Jeffrey Parsons, 62, both received 30 months. They were among a total of 14 who were charged in the scheme, and the final four to be sentenced.

The defendants were part of an executive team for Continuum Healthcare, LLC, which owned Westbury Community Hospital in Houston, as well as community mental health centers in the Houston area. The community mental health centers provided partial-hospitalization program (PHP) services. These centers treat certain psychiatric disorders, such as dementia or Alzheimer’s, and serve as a referral source for those patients who are discharged from the hospital.

The government alleged that the four executives were responsible for the implementation of kickback programs in which numerous people were referred to the community health centers in exchange for payment. Additionally, the defendants submitted false claims since patients who were referred did not qualify for PHP services. In total, Continuum billed Medicare approximately $189 million for fraudulent PHP services.

Others involved in the scheme included owners of personal care homes or marketers for Continuum who received payments ranging from $130,000 to $2.6 million each for referring patients.

Kickbacks for referrals for unnecessary medical services can occur in a variety of different provider types. For example, South Florida has seen it frequently in home health cases where physicians, recruiters, and staffing companies are paid to refer patients for unnecessary home health services.  

The government ’s investigation includes review of the claims data, medical records, patient interviews, and the use cooperating witnesses.

Hiring an experienced defense attorney to conduct a defense investigation while the government is investigating may result in a more favorable outcome. For information call 305-358-4500 or email

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Wesley Malkin