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Healthcare Fraud

Three Convicted of Healthcare Fraud in $40 Million Novus Hospice Case

Novus' former CEO testified against his employees after pleading guilty earlier this year.

Two medical directors and a nurse have been found guilty of healthcare fraud after helping Novus Health Services scam Medicare for services and face decades in prison. 

The scheme was a bold and brazen effort. The company falsely submitted false claims for hospice services while providing kickbacks for referrals from providers, violating HIPAA to recruit beneficiaries, and destroying documents to conceal the fraud from Medicare. The company also shut down operations when they discovered investigators were onto the scheme but opened up a new company and continued the deception. 

The medical director role for clinics and service providers is often one that is susceptible to kickbacks. Physicians often serve as “medical directors” for service providers, where they are meant to provide medical guidance to the organization and help guide the services provided. Because the organization pays the physician, they may be incentivized to refer patients for the services when they don’t need them. Fraud cases often involve kickbacks to their medical directors for referring more patients. 

The federal government has even made a note about these sorts of arrangements. In 2018, the Department of Health and Human Services Office of Inspector General released a fraud alert stating that “physicians who enter into ‘compensation arrangements such as medical directorships must ensure that those arrangements reflect fair market value for bona fide services the physicians actually provide.’”

A jury found Dr. Mark Gibbs and Dr. Laila Hirjee, both medical directors at Novus, and Tammie Little, a nurse with the company, guilty of conspiracy to commit healthcare fraud. Gibbs was also found guilty of two counts of healthcare fraud and one count of obstruction of justice, Hirjee was found guilty of three counts of healthcare fraud and a Title 21 drug offense, and Little was found guilty of three counts of healthcare fraud. Hirjee faces up to 60 years in federal prison, Gibbs faces up to 35 years, and Little faces up to 40 years.

CEO Bradley Harris pleaded guilty before the trial and testified against his former employees. He admitted that between 2012 and 2016, the company billed Medicare and Medicaid for services that were not provided, not directed by a medical professional, or ineligible patients. He used pre-signed controlled substance prescriptions without physician input. He said that Gibbs and Hirjee certified that patients were terminal without seeing the patients, as required by Medicare. The doctors were paid $150 for each false order they signed. 

He also worked with Express Medical, which gave him access to patients’ medical records in exchange for using their lab services. Harris’ wife and other Novus staff called the individuals from Express to recruit them to Novus hospice services, even if they weren’t eligible. 

Other witnesses testified that Gibbs and Hirjee pre-signed blank schedule II controlled prescriptions and allowed Harris and others at Novus to prescribe drugs like morphine without physician oversight. Director of Operations Melanie Murphey testified during the trial, “I was the doctor.”

When Medicare suspended payment to Novus because of billing concerns, the Novus leaders moved patients and employees to a new company and continued to bill Medicare. Medicare and Medicaid paid Novus entities around $40 million for hospice services before the companies were shut down. 

“With today’s guilty verdicts, we are one step closer to bringing this sordid case to a close,” said Acting U.S. Attorney Prerak Shah via release. “These medical professionals behaved unconscionably, allowing Mr. Harris – an accountant – to dictate end-of-life care for suffering patients. The Northern District of Texas will not stand for this sort of misconduct.” 

Twelve other codefendants – Novus CEO Brad Harris, his wife, Novus Vice President of Patient Services Amy Harris, Novus Director of Operations Melanie Murphy, Novus Medical Director Charles Leach, Novus Medical Director Reziuddin Siddique, Novus Medical Director Syed Aziz, Novus Vice President of Marketing Samuel Anderson, Novus Director of Marketing Slade Brown, Novus RN Jessica Love, Novus triage RN Patricia Armstrong, Novus LVN Taryn Stewart, and Ali Rizvi, the owner of a separate physician home visit company – pleaded guilty before the trial and are facing between two and 14 years in federal prison.

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