Lady Justice
A federal jury has found two Southern California residents guilty of paying and receiving illegal kickbacks for patient referrals that resulted in the submission of millions of dollars in fraudulent Medicare claims.
A 75-year-old woman from Glendale, Nita Palma, and a 74-year-old man from Lakewood, Percy Abrams, were convicted Wednesday of health care fraud and illegal kickback offenses following a six-day trial. The pair’s actions caused Medicare to pay out approximately $3.2 million in fraudulent claims for non-terminally ill patients who were improperly enrolled in hospice care, according to the U.S. Department of Justice.
Palma, who had been previously excluded from Medicare due to prior convictions for receiving illegal kickbacks, continued to run the fraudulent operation after purchasing Magnolia Gardens Hospice in 2015. To conceal her ownership interest, Palma allowed her daughter to officially hold the hospice’s ownership. Despite being barred from Medicare, Palma used the hospice to submit fraudulent claims to the program for hospice care that was not actually provided to terminally ill patients, as required by law.
The jury found that Palma paid hundreds of thousands of dollars in illegal kickbacks to marketers, including Abrams, for patient referrals. Abrams, in turn, falsely told potential patients that they did not need to be terminally ill to qualify for hospice care and gathered their personal information to pass on to Palma.
Hospice care is a Medicare benefit provided to terminally ill patients with a prognosis of six months or less to live. However, Palma’s operation billed Medicare for patients who were not dying, resulting in millions of dollars in fraudulent claims.
As part of the scheme, Palma directed her employees to create fake patient records to submit to Medicare after the agency requested additional documentation for the claims. Between 2015 and 2016, she caused the submission of roughly $3.2 million in fraudulent claims, and for each patient referred to her, she paid Abrams and other marketers up to $1,000 per month in kickbacks. Palma personally received about $6,000 per month for each patient billed to Medicare.
In some cases, patients were unaware that they had been enrolled in hospice, and some later discovered they had been denied coverage for other necessary medical services because of their improper hospice enrollment.
Despite the ongoing investigation, Palma allegedly expanded her fraudulent activities by taking control of three additional hospices and continuing to submit more fraudulent claims to Medicare. Court documents indicate that during this period, she caused an additional $4.8 million in false claims to be submitted.
Both Palma and Abrams now face significant prison time. United States District Judge Dolly M. Gee has scheduled their sentencing for April 23, 2025. Palma and Abrams could each face decades behind bars for their roles in the scheme.
The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General and the FBI, with Assistant U.S. Attorneys Roger A. Hsieh and Matt Coe-Odess handling the prosecution.
This conviction highlights the ongoing efforts by federal authorities to crack down on fraudulent schemes that exploit Medicare and harm vulnerable patients.
