In a major development for the nursing home industry, a plea agreement has been reached in the ongoing legal saga involving South Florida healthcare mogul Philip Esformes. Esformes, previously convicted in 2019 for his involvement in a billion-dollar Medicare fraud scheme, had his 20-year prison sentence commuted by former President Donald Trump in 2020, but did not receive a full pardon.
Under the terms of the plea deal, Esformes will plead guilty to the conspiracy count. And, in a significant move for skilled nursing operators, the other five charges, including allegations of bribery payments, money laundering, and obstruction of justice, will be dismissed by the Justice Department and the U.S. Attorney’s Office in Miami.
Importantly, Esformes will not face additional prison time as part of the agreement. However, he is required to pay $5.5 million in restitution to the taxpayer-funded Medicare program. Additionally, he must pledge at least $14 million in assets towards his outstanding forfeiture penalty of $38.7 million – the amount received from Medicare through fraudulent billing at his Miami-Dade chain of assisted-living and skilled-nursing facilities between 2010 and 2016.
Esformes co-owned numerous skilled nursing facilities and assisted living facilities situated across Illinois, Missouri, and Florida. Additionally, along with a hospital in the Miami area, which he strategically utilized to meet the hospital stay requirement.
According to a Mother Jones article, the majority of Esformes’ SNF patients were covered by Medicare, with rates reaching up to approximately $800 per day.
In pursuit of maximizing occupancy to 100%, he overlooked stringent eligibility criteria for Medicare-covered SNF stays, including the 100 consecutive days coverage limit, specific discharge regulations, and the necessity of a three-day hospital stay, among others. Esformes circumvented these regulations by offering bribes to doctors for their approval.
U.S. District Judge Robert Scola has confirmed the plea agreement, canceling a scheduled hearing for a second trial. The plea and sentencing hearing for Esformes is now set for February 22.
Despite the commutation, Esformes had faced the possibility of a retrial on the main healthcare fraud conspiracy count and five related charges due to a jury deadlock in his first trial. However, recent negotiations between his defense team and federal prosecutors have resulted in a plea agreement.