Therapy company to pay in fraud claims

GLENDALE — Fraudulent medical billing has become increasingly common among health-care providers and businesses contracted with medical facilities, officials said Tuesday.

A lawsuit filed by two whistle-blowers, Janine Gostel and Sonia Sarmiento, recently led a Glendale-based physical therapy company, Interstate Rehabilitation LLC, to pay $233,345 to resolve allegations that it fraudulently billed Medicare for services that it did not perform, according to court documents.

“We do need insiders who have the special knowledge to come forward,” Assistant U.S. Atty. Lisa Palombo said.

The billings may have never been discovered if it wasn’t for Gostel and Sarmiento, she said.

The pair filed a lawsuit against their former employer, claiming that it fraudulently billed health-care facilities between 1998 and 2002 for work that was supposedly performed by a licensed physical therapist, but was not, according to court documents. The pair alleged the health-care company then submitted bogus claims for payment to Medicare.

The parties in the case — Gostel and Sarmiento, the U.S. attorney’s office and the company’s owners, Beth Celo and James and Sandra Pietsch — settled the case two weeks ago, said Thom Mrozek, a U.S. attorney’s office spokesman.

Sixteen percent of the settlement will be given to Gostel and Sarmiento to divide between themselves, he said.

Celo and the Pietsches agreed to pay without admitting any wrongdoing, Mrozek said.

Health-care fraud has been “a huge problem for many years,” he said.

“I think you have a system that has so much money in it that unscrupulous people will seek out loopholes,” Mrozek said.

Health-care fraud cases are generally resolved with settlements, but some cases can result in criminal prosecution, he said. Six lawyers with the U.S. attorney’s office work specifically on such cases.

“We see all kinds of them,” Mrozek said.

Some companies will change medical codes on billing statements in order to get more money in return or they will bill for unneeded medical equipment, such as motorized wheelchairs, which are worth thousands, he said.

Health-care fraud cases are often initiated by whistle-blowers, Palombo said.

A person who believes wrongdoings have occurred in his or her workplace can file a lawsuit against a company, and the U.S. attorney’s office will prosecute the case on the whistle-blower’s behalf, she said.

Anyone who suspects health-care fraud has occurred in his or her workplace or knows of fraud that has occurred can report it to the Department of Health and Human Services at (800) 444-8477.