Last of 6 Sentenced in Braking Point Medicaid Fraud Scheme
Updated: 10 a.m. June 17, headline edit
CLEVELAND — Justin E. Herdman, United States Attorney for the Northern District of Ohio, announced Tuesday that Jennifer Sheridan, age 42 of Austintown, Ohio, was sentenced today to 27 months in prison and ordered to pay $15,957,148 in restitution after pleading guilty to one count of health care fraud conspiracy.
Jennifer Sheridan is the last of six defendants to be sentenced for crimes related to a health care fraud conspiracy in which Medicaid was billed $48 million for drug and alcohol recovery services, many of which were not provided, not medically necessary, lacked proper documentation, or had other issues that made them ineligible for reimbursement.
“Today’s sentencing marks the conclusion of a case in which the defendants conspired together to use the drug epidemic as a way to steal tens of millions of dollars from taxpayers through fraudulent billing practices and other crimes,” said Herdman. “The defendants’ actions have earned them jail time and over $24 million in restitution. We will continue to hold anyone accountable who tries to take advantage of the drug epidemic and Ohio taxpayers.”
“This is the last defendant to receive their deserved sentence for fraudulent and deceptive criminal behavior,” stated FBI Special Agent in Charge Eric Smith. “These individuals preyed on a health care system that is in place to help those in need and not to be used as an ATM to cipher millions of dollars from the taxpayers for their own pleasures.”
On Jan. 22, Ryan P. Sheridan, 39, of Leetonia was sentenced to seven and a half years imprisonment and ordered to pay nearly $24.5 million in restitution after pleading guilty to various health care fraud conspiracy crimes. Sherdian was the owner and operator of Braking Point Recovery Center, which operated in the Youngstown and Columbus areas.
On March 12, co-defendant Kortney L. Gherardi was sentenced to 18 months imprisonment and ordered to pay $2.4 million in restitution after pleading guilty to conspiracy to commit health care fraud.
On Jan. 21, co-defendants Dr. Thomas Bailey and Dr. Arthur Smith were sentenced to two years of probation with six months of community service and a $5,000 fine. Co-defendant Lisa Pertee was sentenced to one year of probation with 60 days of community service, and order to pay $2,200 in special assessments.
According to court documents, Ryan Sheridan was the sole owner of Braking Point Recovery Center, which operated drug and alcohol rehabilitation centers in Austintown and Whitehall, Ohio, that provided detox, intensive outpatient treatment, day treatment and residential living rehabilitation.
Between January 2015 and October 18, 2017, Sheridan and various other defendants submitted or caused to be submitted billings to Medicaid for drug and alcohol services that were: coded to reflect a service more costly than was actually provided; without proper documentation; without proper assessment documents containing valid diagnosis; billings for patients whose records did not contain diagnosis by a physician; related to treatment at unlicensed inpatient beds; billings related to dispensing of Suboxone, even though the treating physician did not have the authority to do so; for case management services when, in fact, the clients were working out at Sheridan’s gym; billings based on quotas provided to the nurses by the defendants to bill four to five hours of treatment daily, even if the services were not medically necessary; billing for in-patient detox and drug treatment services that were, in fact, provided in an out-patient setting, among other violations.
Braking Point submitted approximately 134,744 claims to Medicaid for more than $48.5 million in services it claimed to provide between May 2015 and October 2017. The claims caused Medicaid to pay Braking Point more than $31 million. Medicaid suspended payments to Braking Point on Oct. 18, 2017.
Sheridan and other defendants developed a standard protocol of distributing the same amount of Suboxone to every patient seeking drug treatment immediately upon entering Braking Point’s detox program without being evaluated by a properly licensed physician to determine the medical necessity for the use of Suboxone. Sheridan had the treating physician use another physician’s DEA data waiver license to dispense more than 3,000 doses of Suboxone in 2017 alone without the data waiver physician having seen the patients.
Sheridan also made numerous financial transactions in excess of $6 million, involving money derived from these unlawful activities, including health care fraud and conspiracy to commit health care fraud. As such, Sheridan was ordered to forfeit property and proceeds obtained as a result of these crimes, including nearly $3 million, property in Columbiana, Mahoning and Trumbull counties, and eight automobiles, including replicas of vehicles used in the movies “Back to the Future,” “Ghostbusters,” and “Batman.”
The case was prosecuted by Assistant U.S. Attorneys Mark S. Bennett and Jason M. Katz, and Special Assistant United States Attorney Jonathan Metzler following an investigation by the Department of Health and Human Services — Office of the Inspector General, the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service, and the Ohio Attorney General’s Medicare Fraud and Corruption Unit.
SOURCE: U.S. Attorney’s office in Cleveland.
Published by The Business Journal, Youngstown, Ohio.