Coral Gables firm says former employees ran Medicare scam

Susan Rawlings Molina, left, and Jaime Guttman.
Susan Rawlings Molina, left, and Jaime Guttman. ROAR MEDIA

Back in January, veteran business executive Susan Rawlings Molina was hired to help turn around a struggling Coral Gables company that managed healthcare plans for Medicare and Medicaid patients.

She says she soon discovered something fishy about how much money Florida Healthcare Plus was paying a couple of medical providers.

Molina's hunch would prove to be correct. In November, federal prosecutors charged six former employees and five others with illegally enrolling beneficiaries with fake Florida addresses so they could receive millions of dollars in taxpayer-funded healthcare while they were living as retired expatriates in Nicaragua and the Dominican Republic.

“In my 27 years of experience, I've never seen anything like it,” Molina, FHCP’s chief executive officer, told reporters Wednesday. “The actions [of these former employees] are deplorable.”

Molina, along with the managed-care company’s lawyer, did a sit-down with reporters at Florida Healthcare Plus’ penthouse suite in downtown Coral Gables in an attempt to repair some of the damage caused by a federal indictment.

Although the company itself was not accused of wrongdoing, a half-dozen former employees, including chief operating officer Pedro Hernandez and marketing director Abram Rodriguez, were charged as members of an international ring that fleeced $25 million from the Medicare and Medicaid programs for the elderly, disabled and poor.

On the day of their arrests, about 60 federal agents raided the company’s offices to seize records and other evidence. On Nov. 19, federal prosecutors also sought to freeze the bank assets of Florida Healthcare Plus, which would have crippled the company.

But Molina and the company’s lawyer, Jaime Guttman, persuaded the prosecutors within 24 hours to halt the civil action freezing those assets by explaining that Florida Healthcare Plus had reported the wrongdoing to Medicare regulators in August — three months before the indictment was unsealed.

“They realized this was a mistake,” Guttman said.

Soon after she took the reins of the private managed-care company in January, Molina said she ordered two internal reviews of its books and then brought in outside legal and accounting experts to evaluate them.

“There were unusually high payments to two medical groups,” she said about her initial instincts to order the audits. “I’m thinking to myself, ‘Why are we paying these people so much money?’”

She said the high payments were going to two medical providers cited with the defendants in the Medicare fraud indictment: Axis Le, owned by Erendira Delgado, operated in the Dominican Republic; the other, named after its owner, Rodney Montoya, operated in Nicaragua. Montoya was charged in the indictment along with his father, Santiago B. Montoya, a 72-year-old physician.

Dr. Montoya was the medical front man for the one-of-a-kind scam that raked in millions of dollars from Medicare for services provided to retired U.S. citizens living in Nicaragua and the Dominican Republic, authorities say. A licensed physician, Montoya treated patients in Nicaragua and Miami.

In total, Assistant U.S. Attorney Eric Morales said, about 1,200 expatriates established phony Florida addresses to enroll in Medicare and Medicaid through Florida Healthcare Plus.

Hernandez, the chief operating officer who left the company last year, is accused of directing the illegal exportation of Medicare benefits. According to an indictment, he collaborated with Rodriguez, the company's marketing director who left in April, to sign up retirees as Medicare patients in the two Latin American countries from 2011 to 2014.

Morales said that Florida Healthcare Plus, which operates under the private Medicare Advantage plan, received about $10.5 million in government payments for illegally treating the beneficiaries in Nicaragua and the Dominican Republic.

“Florida Healthcare Plus at that time was a dirty company,” Morales told a magistrate judge last week, adding that Hernandez and his conspirators also used other South Florida managed-care companies to carry out the rest of the alleged scam. At another point, Morales called the company, which operates under the Medicare Advantage program, “corrupt.”

Florida Healthcare Plus and its contractors allegedly promoted the program to expats in Nicaragua and the Dominican Republic by advertising in local newspapers and on the Internet. They first recruited retired Americans and native Nicaraguans who had fled their homeland for the United States during a civil war, and then targeted retirees in the Dominican Republic.

U.S. embassies in both countries issued warnings that it was illegal to receive healthcare services paid by Medicare in a foreign country except in an emergency.

Florida Healthcare Plus and the contractors flew some patients to Miami to establish phony addresses and undergo evaluations for Medicare, the prosecutor said. Then, they returned to the Latin American countries, where they were treated by Montoya but also by unlicensed foreign doctors, Morales said.

The defendants are also accused of defrauding the parallel state Medicaid program for low-income people.

Florida Healthcare Plus and its contractors misled the expatriates to exploit them in order to swindle Medicare, the indictment said. The defendants told expatriates that “people retired in the U.S. now in Nicaragua can get free medical care, and that medical coverage offered in Nicaragua and the Dominican Republic was not offered by, or billed to, Medicare,” the indictment stated.

FHCP’s Molina said no one in the company — other than the half-dozen employees named in the indictment — was aware of the alleged wrongdoing until the internal and external audits this year, including the firm’s main investor, Jesus Quintero.

She said the indicted employees used the company as a “cover” to carry out the scheme.

Molina said Florida Healthcare Plus, with about 10,000 Medicare and Medicaid beneficiaries, expects revenue to total about $130 million this year. But she estimated the company would lose money.

Projecting into 2015, she said the company would collect the same amount of revenue but, by trimming expenses, should be “slightly profitable.”

But, perhaps most important, she said, “The company is not the company it once was.”