Mills may be in prison, but he’s still free to talk

And Congress listens, say home care leaders

As one home care industry executive recently lamented, "The memory of Jack Mills still walks the halls of Congress."

The former owner of ABC Health Care (now known as First American Health Care) may be behind bars now, but his influence reaches far beyond the walls of the minimum security federal prison in Jesup, GA, where he is serving a 7 and a half year sentence for his conviction in 1996 on more than two dozen counts of fraud. Ask almost anyone in the home care industry today, and you will be told that Mills’ spectacular rise and fall helped light the fire under government efforts to eradicate fraud and abuse in Medicare.

True, others may have been guilty of cheating Medicare, but few have seemed to do it with the flamboyance of Robert "Jack" Mills, who parlayed loopholes in the program’s reimbursement system into millions. He developed a penchant for luxury, enjoying private plane junkets to Mexican resorts and expensive jewelry, and living in a lavish house on St. Simon’s Island, GA. Residents took to calling the place "Medicare Manor."

Yet even now — after his conviction and being forced to sell ABC — Mills remains unrepentant, certain he was railroaded by federal prosecutors. He was quoted recently as saying he had "no remorse" over any of his actions related to ABC, which is consistent with what he said during his trial: "The [Medicare] manual tells you what you can’t do. So if it’s silent you can do it."

According to a recent story in The Wall Street Journal (July 21, 1997), Mills appears to be flourishing in prison, where he teaches a business class to fellow inmates and even admits taking extra food from the prison commissary to supplement a diet he contends to be too meager.

Mills also has time to keep up with the industry, according to the article. He takes a swipe at hospitals, accusing them of getting Medicare to absorb billions of dollars in indirect costs using their home health agencies for "cost shifting."

Such a charge could not go unchallenged. Lorraine Waters, BSN, C, MA, director of Southern Home Care, a hospital-based agency in Jeffersonville, IN, argues, "Exactly the same practice is done by home offices of freestanding agencies that have a lot of subsidiaries — the name-brand, for-profit freestanding agencies. I know; I used to work for one. My branch office had to absorb a certain percentage of home office expenses in return for their support. The more visits we made, the greater the dollar amount."

Cathy Frasca, vice president of Home Health Services for Homestead, PA-based South Hills Health System, finds humor and horror in Mills’ statements. "Jack Mills resented anything hospitals did. He’s done more to hurt the industry than anyone. We’ll suffer for years to come because ABC has given the industry a bad name." (See related story on Columbia/HCA’s latest troubles, p. 105)

Backlash will make life ‘miserable’

"The scrutiny we are going to have imposed on us will be an outgrowth of ABC. It will make our life miserable for years to come. That’s terrible, especially when there already are so many challenges. We have sicker patients, we have to do more with fewer resources, and at the same time Jack Mills boasts [during his trial] that he had more attorneys than O.J. The prisoners probably think he’s great."

Frasca goes on. "He’s in jail because he stole from the government, and here he admits stealing from the prison system as reflected in The Wall Street Journal article. This is sad. The bulk of providers just want to provide patients with quality care, and they would never even think of doing the unlawful acts that Jack Mills did."

By the time of his trial, Mills’ company was the largest privately held home health care provider in the United States, and Medicare reimbursement represented approximately 95% of its total revenues, according to the General Accounting Office (Letter Report, July 19, 1995, GAO/OSI-95-17). ABC’s growth was enviable: In 1990, the company had 141 local offices in 10 states. It had 21,431 patients, performed almost 1.3 million visits, and had Medicare revenues of $83.5 million. At the end of 1994, ABC had 354 offices in 21 states, made 7.8 million visits to 58,330 patients, and had Medicare revenues totaling $615.9 million.

In 1995, the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services sent ABC an exclusion letter, seeking to exclude it from participation in the Medicare program for seven years. The letter charged, in part, that ABC had submitted false or fraudulent charges to the Medicare program for patient-related services allegedly rendered during the course of three fiscal years —1987, 1988, and 1992. Among the improper charges, the letter listed a number of items that were acquired "solely for the personal use or enjoyment of the Mills family," e.g., condominium utility expenses, maid services, and automobile lease payments.

ABC appealed the proposed exclusion letter, and in 1996, Mills went on trial.

Frasca manages a laugh when she considers Mills, the teacher. "The inmates will be graduates of Jack Mills’ ‘School of Lower Learning’ under his preceptorship, now won’t that be interesting? You don’t mind if someone has some remorse, even feels a little bit sorry, but to just thumb your nose at the system — that is inexcusable."