San Leandro Nursing Home Owner Indicted for Overbilling Medicare

A federal grand jury has indicted San Leandro-based St. Luke's Sub-acute Hospital and Nursing Centre Inc. and its owner for allegedly defrauding Medicare of more than $1.5 million, the Oakland Tribune reports. The indictment alleges that Guy Roland Seaton, the nursing home's owner, president and chief operating officer, from 1996 to 1999 "overstated" reimbursable Medicare costs to payers and attempted to cover up the fraud by submitting false nursing schedules, payroll reports and timecards to Medicare auditors (Richman, Oakland Tribune, 5/9). Malcolm Segal, Seaton's attorney, said, "Everyone agrees that St. Luke's has provided excellent medical care for its patients in the past and will do so in the future." He added that the charges were "billing disputes with Medicare" and that the issue would be resolved with "Medicare and federal prosecutors" (Lee, San Francisco Chronicle, 5/9).

In other fraud news, agents from state Attorney General Bill Lockyer's (D) Bureau of Medi-Cal Fraud have arrested 21 employees of the Caring Nurses Agency of Sacramento, alleging that they worked as certified nurse assistants without proper certification, the Sacramento Bee reports. The owner of the agency was also arrested and faces multiple charges, including "conspiracy to send in non-qualified people to nursing homes" and conspiracy to commit elder abuse. Certified nurses must be licenced by the state, and any previous criminal convictions must be considered before they may be placed to work in a nursing home. Of the 21 people arrested, all but five had criminal convictions, which included felony theft, drug abuse, spousal abuse, burglary and assault with a deadly weapon. Mark Zahner, supervising deputy attorney general for the bureau, said that some of the arrested workers had "never been trained," while others had had their licenses revoked. While Zahner said that there were no reports of patient harm by the unlicensed workers, he added, "The potential for harm is tremendous in this kind of situation. The idea [behind the investigation] is to have an impact on the industry" (Teichert, Sacramento Bee, 5/10).