It has been called “The Healthcare Fraud of the Century,” but the century is still relatively new, and the principles of fraud are unchanging. Certainly, this one is bad, when medical ethics turn into a folly!
Phillip Esformes is a man without ethics; however, he was not alone in his greed nor will he be the only one charged. His fraud bilked Medicare and Medicaid for more than $1.3 billion.
Esformes was arrested in 2016. At the time of his arrest, he was living a life that few of us can imagine: mansions, jets, tailor-made clothes, fine food, and wine. In the spirit of the day, he was accused of bribing a coach $300,000 to get his son into the University of Pennsylvania. The money was a drop in the bribery bucket.
The Nursing Home Game – When Medical Ethics Turn Into A Folly
We might consider Esformes as the Bernie Madoff of nursing homes except for one detail; in many ways he is even more unethical. Esformes owned several nursing homes and assisted care centers.
At some point in his career, most probably around 1997, he decided he could get more patients jammed into his facilities if he could bribe physicians for their referrals. In numerous bribery cases, the patients did not need to be referred at all. They were recovering and could have lived independently. However, by referring them to his facilities he could boost the money he was charging the government.
It wasn’t quite so clean-cut as might appear at first. Other healthcare providers were bribing Esformes who were interested in cashing in on the patients in his homes. The companies who bribed the Esformes-owned nursing homes included therapists, eye care centers, nursing care, medical laboratories, and nursing companies. He took bribes in the form of wads of cash (which were untraceable) or cash to “escorts” who Esformes frequented.
According to the U.S. Justice Department:
“Philip Esformes orchestrated one of the largest health care fraud schemes in U.S. history, defrauding Medicare and Medicaid to the tune of over a billion dollars (because of Esformes’ actions) American taxpayers and vulnerable beneficiaries … were denied the level of care that they needed and deserved.”
No One Innocent (Except The Patients)
There are no innocent parties in this fraud save, perhaps, for the patients. It is impossible to calculate the lives that may have been neglected or the years of life’s enjoyment that were cut short by greed. Every other provider associated with Esformes was on the take or took. It was a Who’s Who of healthcare fraud, from physicians to therapists. The American taxpayers were cheated out of more than $1 billion. Who knows how many legitimate patients who could have been saved, were sacrificed due to Esformes’ greed?
In order for any fraud to occur, there must be an opportunity, a chance to steal. Everyone involved saw that as long as a network was created where everyone was potentially working together to steal from the system, the opportunity could remain intact for years. The unethical providers, whether the medical laboratories or the therapists realized that as long as the bribes kept coming, Medicare and Medicaid would pay up.
What was the need here? Need is the second element of fraud. For some it was money and for others, it may have been power. They took as much as they could, for as long as they could, without so much as an ethical blink of the eye.
Finally, we come to the subject of rationalization. There are many levels. I must first point out that as Esformes goes to court, he is reputedly denying many of the charges, saying that he was only providing quality medical care. That is his first level of rationalization. As the consummate businessman and huckster, he could rationalize that his 30 nursing homes and assisted care facilities were simply helping people. Never mind many of the patients never needed to be in his facilities, or that he bribed unscrupulous physicians to send him patients, in his mind, he was simply providing care. The next rationalization might have been that Medicaid was a big piggy-bank and full of waste, that the taxpayers would not miss the money. He might have rationalized that he was somehow entitled to it. Finally, there is the old stand-by of “everyone is doing it.” Truth is, not everyone does it, only the unethical, only men such as Esformes and those who were his co-conspirators.
This case is what happens when there are no ethical standards, low expectations, and little or no oversite. Unfortunately leads to when medical ethics turn into a folly.
