A Glendale resident has been sentenced to nine years in federal prison for her role in a hospice fraud scheme that resulted in more than $10 million in false Medicare claims. Nita Almuete Paddit Palma, 75, received the sentence from United States District Judge Dolly M. Gee, who also ordered her to pay over $8.2 million in restitution.
At a separate hearing, Percy Dean Abrams, 75, of Lakewood, was sentenced to three years of probation with two years of home confinement.
A federal jury found Palma guilty of 12 counts of health care fraud and 16 counts related to illegal kickbacks for patient referrals. Abrams was convicted on six counts of receiving illegal kickbacks for health care referrals.
Palma had previously been excluded from participating in Medicare due to earlier convictions for receiving illegal kickbacks. Despite this exclusion, she purchased Magnolia Gardens Hospice through her daughter and C@A Hospice through her husband in 2015, hiding her ownership from Medicare authorities.
According to the U.S. Attorney's Office, "Palma then paid 'marketers', including Abrams, hundreds of thousands of dollars in illegal kickbacks for patient referrals that Palma could bill to Medicare for purported hospice care."
Hospice care is intended only for patients who are terminally ill with a life expectancy of six months or less and focuses on comfort rather than curative treatment. When enrolling in hospice under Medicare rules, patients give up certain other benefits.
Prosecutors said that "consistent with instructions provided by Palma, Abrams falsely represented to prospective patients that they did not need to be dying to be on hospice. After collecting personal identifying information from prospective patients that were not dying, Abrams sent the information to Nita Palma so she could bill Medicare for purported hospice care."
Through both hospices controlled by Palma starting in 2015, about $10.6 million worth of fraudulent claims were submitted for patients who were not actually terminally ill. "Palma received approximately $6,000 each month a patient was billed to Medicare for hospice," court documents stated. "In turn, Palma paid Abrams and other marketers up to $1,000 per month in illegal kickbacks for each patient referred to her that was billed to Medicare for hospice." Some affected patients were unaware they had been signed up and discovered it only after being denied medical coverage elsewhere.
When Medicare sought documentation supporting these claims from Magnolia Gardens Hospice during its review process, "Palma and her husband directed employees to create fake patient charts and had those fake patient charts submitted to Medicare." The investigation further alleges that while awaiting trial on these charges, Palma took control of three additional hospices and was involved in submitting another $4.8 million in claims.
The investigation was conducted by the United States Department of Health and Human Services Office of Inspector General along with the FBI.
Assistant United States Attorney Roger A. Hsieh from the Major Frauds Section and Matt Coe-Odess from the Domestic Security and Immigration Crimes Section prosecuted the case.
