A federal jury in the Eastern District of Michigan convicted a Michigan nurse and home healthcare agency owner on May 15, 2026, for operating a $1.6 million Medicare fraud scheme.
According to court documents and evidence presented at trial, the 55-year-old defendant from Farmington Hills, Michigan, owned and operated a home healthcare agency. Between 2018 and 2021, she bribed a discharge nurse at a Detroit hospital to identify Medicare patients and secretly fax their confidential medical records to her company without the patients’ knowledge or consent.
The defendant had previously worked with the discharge nurse at another home health company she co-owned. After launching her new company, she paid the nurse an additional $100 per patient referral. In total, she paid the nurse more than $130,000 through CashApp, PayPal, checks, and cash.
Using patients’ medical and personal information, the defendant fraudulently billed Medicare for home health services. Evidence at trial showed she paid the discharge nurse about $300 for each patient whose services were successfully billed to Medicare.
Prosecutors also showed that, between 2018 and 2024, the defendant falsely claimed that doctors had certified patients as eligible for home health services, including meeting Medicare’s homebound requirement. In reality, evidence showed that many patients had never been evaluated for home healthcare services. In some cases, the defendant used the identities of real doctors to create fraudulent records, even though the doctors had never treated the patients or authorized the billing.
A witness testified that one patient for whom the agency received thousands of dollars in Medicare payments never received any services from the company. Evidence also showed the agency failed to maintain patient files for more than one-third of the patients tied to over $1.2 million in Medicare payments. The scheme caused approximately $1.6 million in losses to Medicare.
The jury convicted the defendant of five counts of healthcare fraud, conspiracy to defraud the United States and pay illegal healthcare kickbacks, and four counts of paying illegal healthcare kickbacks. She is scheduled to be sentenced on Sept. 24. She faces a maximum penalty of 10 years in prison for each healthcare fraud count, 10 years for each kickback count, and five years for the conspiracy count.
The FBI Detroit Field Office and the Department of Health and Human Services Office of Inspector General investigated the case.
Compliance Perspective
Issue
The federal Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration—directly or indirectly—to induce or reward referrals for items or services reimbursable by federally funded healthcare programs. Improper financial relationships involving referrals, patient admissions, or healthcare services may create significant regulatory and legal exposure for both individuals and organizations. Kickbacks may take many forms, including cash payments, gifts, consulting arrangements, or other financial incentives. In addition, inappropriate access to or use of protected health information (PHI) in connection with referral activity may increase compliance and privacy-related risk.
Discussion Points
- Review policies and procedures governing referral relationships, access to PHI, and financial arrangements involving vendors, contractors, or referral sources to ensure compliance with federal fraud and abuse laws. Policies should clearly prohibit improper inducements and address documentation, authorization, and oversight of referral-related activities. Organizations may benefit from periodic compliance assessments or independent operational reviews to evaluate internal controls and identify potential vulnerabilities involving referral practices or related billing activity.
- Provide ongoing education and training to appropriate staff regarding the Anti-Kickback Statute, referral practices, documentation standards, and patient privacy obligations. Training should reinforce recognition of potential red flags involving improper financial relationships, unauthorized disclosure of patient information, and irregular referral activity, as well as procedures for escalating compliance concerns through established reporting channels. Med-Net Academy offers the course Fraud Series Module 9 – Independent Contracts and Referrals, which teaches staff how to follow company contracting policies, understand referral requirements, and recognize key elements of the Anti-Kickback Statute.
- Conduct routine audits and monitoring of referral activity, financial relationships, documentation practices, and related billing activity to identify patterns that may indicate elevated compliance risk. Audits should also evaluate whether patient records and supporting documentation are properly maintained and whether referral-related processes align with organizational policies and regulatory expectations. Some organizations utilize focused mock audits or external compliance reviews to proactively identify operational vulnerabilities and support timely corrective action before issues escalate into enforcement matters. Contact Med-Net Healthcare Consulting or info@mednetconcepts.com for more information.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*