Home Health Care Owner Pleads Guilty To Medicare Fraud, Kickback Scheme

by Joseph G. Lariosa

CHICAGO (jGLi) – A Filipino American owner of a home health care business pleaded guilty Friday (April 20) before United States District Judge Frederick J. Kapala in the outlying suburb of Rockford, Illinois to healthcare fraud and kickback violations, according to Assistant U.S. Attorney Scott A. Verseman.

Merigrace Orillo, 45, of Elmhurst, Illinois and co-owner and operator of Chalice Home Heathcare Services, Inc. with her husband, Virgilio Orillo, admitted that her fraud scheme defrauded the Medicare program of more than $400,000. Chalice has offices in Chicago, Freeport and Morris, Illinois.

Ms. Orillo pleaded guilty to Count One, which charges defendant with health care fraud, and Count Two, which charges defendant with aiding and abetting another in paying kickbacks for patient referrals under a Federal health care program.

In a written plea, Ms. Orillo admitted that from January 2007 thru April 2010, she and her late husband, Virgilio Orillo, falsified documents in order to pad the payments Chalice received from Medicare.


Medicare is a national healthcare program, which provides free or below-cost health care to eligible beneficiaries, primarily persons who are 65 years of age or older. Chalice was an enrolled provider with the Medicare program since 2004.

Chalice’s nurses, nurses’ aides, physical therapists, and occupational therapists provided services to patients in their homes. Chalice was usually paid for these services through the Medicare program.

Prior to submitting a claim before Medicare, the claimant-home health care provider is required to assess the patient and complete a Comprehensive Adult Nursing Assessment with Outcome and Assessment Information Set (OASIS) element form.

The OASIS form is used to determine if the patient was home bound, the severity of symptoms, and reimbursement rate to the home health care provider. If after 60 days the patient needs additional home health services, the home health care provider is required to complete a Recertification/Follow-Up Assessment form (“Recertification”).

The Recertification form incorporates OASIS elements and is used to determine whether the patient is still eligible for Medicare reimbursed home health care and, if so, the rate of reimbursement.

The rate of reimbursement will determine the Medicare will pay for home health care for the patient. And this rate was falsified by the Orillio couple after the rate was submitted to them by the nurses that caused Chalice to receive more than $500,000 in Medicare benefits, which it was not entitled to receive.

Assistant U.S. Attorney Randall Samborn, public information officer of the U.S. Attorney’s office for the Northern District of Illinois, said Merigrace Orillo’s sentencing is set on July 19, 2012.

The charges against Merigrace Orillo’s husband, Virgilio Orillo, had been dropped following his death last Aug. 30, 2011 while the case was pending.

Healthcare fraud carries a maximum penalty of ten years in prison and a $250,000 fine, or a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater, as well as restitution to the victims. The kickback charge carries a maximum penalty of five years in prison and a $250,000 fine.

Judge Kapala has an option to modify, increase or decrease the penalty based on U.S. Sentencing Guidelines at the sentencing.

In the plea agreement, Orillo also admitted that she knowingly assisted her husband in paying cash kickbacks to a Chicago doctor. The kickbacks were paid in return for the doctor referring patients to Chalice for home healthcare services. Orillo admitted that she withdrew cash from Chalice’s bank account and provided that cash to her husband to be used to pay these kickbacks.

The indictment, which was filed on February 15, 2011, charged both Orillo and her husband Virgilio with healthcare fraud.

The filing of charges was part of a nationwide takedown by Medicare Fraud Strike Force operations that led to charges against 111 defendants for their alleged participation in numerous Medicare fraud schemes.

Earlier, Alona Bugayong, 38, also a Filipino American employee of another home health firm in Lincolnwood, Illinois, was sentenced to a 10-month probation after pleading guilty to one of two counts of paying $500 kickback to anybody or company owner, who would refer an elderly patient to Mr. Bugayong’s firm.

Meanwhile, U.S. District Judge Jeffrey Cole earlier dismissed without prejudice charges of conspiracy to violate federal anti-kickback statute by agreeing to offer or pay or to solicit or receive kickbacks for the referral of Medicare patients for home health care services against five Filipino Americans associated with Goodwill Home Healthcare, Inc. (“Goodwill”) in Chicago.

The Fil Ams were Marilyn Maravilla, a nurse, who became the controlling owner of Goodwill, Junjee L. Arroyo, Ferdinand Echavia, Kennedy Lomillo and Baltazar S. Alberto. (lariosa_jos@sbcglobalnet)

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