Health Care Fraud Scam
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Final four sentenced in $189M Health Care Fraud Scam

Four executives of Continuum Healthcare and its various health centers have been ordered to federal prison for a massive scam perpetrated in the Houston area, announced Acting U.S. Attorney Jennifer B. Lowery.

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HOUSTON – Bobby Rouse, 81, and Steven Houseworth, 47, both of Houston; Jeffery Parsons, 62, Crockett; and David Edson, 72, Palm Harbor, Florida, had all pleaded guilty to their respective roles in the scam.

On April 22, U.S. District Judge Gray Miller sentenced Rouse to 120 months in prison. Edson received a 48-month-term of imprisonment, while Parsons and Houseworth each received 30 months in prison.  

Rouse, Houseworth, Edson and Parsons were part of the executive team for Continuum Healthcare LLC, which owned Westbury Community Hospital in Houston as well as community mental health centers in the Houston area known by their locations as Hornwood, Baytown and Missouri City.

Each location operated a partial hospitalization program (PHP). The PHP was supposed to be a treatment program for individuals with mental illness, intended to closely resemble a highly structured, short-term hospital inpatient program. However, while it was a distinct and organized intensive treatment program, it offered less than 24-hour daily care.

In 2010, Continuum opened Westbury Community Hospital with Hornwood and Baytown becoming outpatient centers and continuing to operate their existing PHPs under the Westbury name. Westbury also opened a PHP.

The four men were responsible for the day-to-day operation of Continuum/Westbury and were involved in the implementation of the various kickback programs. Numerous people were referred for treatment in exchange for payment. However, the vast majority did not qualify for PHP services, because they were not experiencing an acute psychotic episode or were actually suffering from mental retardation, dementia or Alzheimer’s.

In total, Continuum billed Medicare approximately $189 million in total for fraudulent PHP services and Medicaid paid approximately $66 million on those clams.

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The FBI, Department of Health and Human Services – Office of the Inspector General, Texas Attorney General’s Medicaid Fraud Control Unit and IRS – Criminal Investigation participated in the joint investigation. Assistant U.S. Attorneys Tina Ansari and Special Assistant U.S. Attorney Justin Blan are prosecuting the case.

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