Michigan Home Health Agency Owner Convicted of $1.6M Medicare Fraud Scheme

FARMINGTON HILLS, Michigan—A federal jury in the Eastern District of Michigan convicted a Michigan nurse and home healthcare agency owner yesterday for allegedly operating a $1.6 million scheme to defraud Medicare.

According to court documents and evidence presented at trial, Ruby Scott, 55, of Farmington Hills, Michigan, owned and operated Delta Home Health Care LLC. From 2018 through 2021, Scott bribed a discharge nurse at a Detroit hospital to identify Medicare patients and fax their confidential records to Delta, unbeknownst to the patients. 

Scott allegedly developed a kickback relationship with the hospital discharge nurse at a home health company she had previously co-owned, offering the nurse an additional $100 per patient to encourage her to refer patients to her new company. Court documents said Scott paid the discharge nurse over $130,000 by CashApp, PayPal, check and cash. Scott then allegedly used these stolen profiles to bill Medicare for home health services, exploiting the diagnostic and personal information of patients who were unaware their data had been compromised.

The evidence at trial showed Scott paid the discharge nurse approximately $300 for each patient that Scott successfully billed to Medicare. In billing claims for patients who were obtained through kickbacks, as well as other claims between 2018 and 2024, Scott falsely represented to Medicare that a doctor had certified patients as meeting the Medicare requirements to receive home health services, including being homebound, when evidence proved no doctor had ever evaluated these patients for home health services. 

In many instances, Scott used the identities of real doctors to fabricate the existence of these evaluations when, in reality, these doctors had never even met the patients and did not know that Scott was using their information to fraudulently bill Medicare. A witness testified that one patient for whom Delta received thousands of dollars in payments had never received services from Scott’s company. Delta failed to maintain patient files for over one-third of the patients for whom it submitted claims to Medicare, for whom Medicare paid Delta over $1.2 million. Court documents said. Scott caused approximately $1.6 million in losses to Medicare, which a witness testified drains the Medicare trust fund and could make it difficult for Medicare to pay on claims that are true and accurate.

The jury convicted Scott 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 Thursday, Sept. 24 and faces a maximum penalty of 10 years in prison as to each healthcare fraud count, a maximum penalty of 10 years in prison as to each kickback count and a maximum penalty of five years in prison as to the conspiracy count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.