In short
- Butts billed for tens of thousands of hours of care never provided, diverting resources from vulnerable individuals.
- She was ordered to pay $1,253,920.47 in restitution to Medicaid after her adult family homes were found severely understaffed.
What happened
Lori Butts, former operator of Lordan Care Adult Family Homes, was sentenced to 28 months’ incarceration for healthcare fraud after stealing $1,253,920.47 from a Medicaid-funded program by billing for care never provided between July 2019 and December 2020. The scheme involved billing for two workers to provide 24-hour dedicated service to a single resident, despite those caregivers not being present.
The adult family homes were severely understaffed and experienced frequent police contact due to insufficient staffing. In addition to the prison sentence, Butts was ordered to pay $1,253,920.47 in restitution to Medicaid. The case was investigated by the FBI and IRS Criminal Investigation, and prosecuted by Assistant United States Attorneys Carter B. Stewart and Zachary J. Corey.
In numbers
- 28 months’ incarceration sentenced
- $1,253,920.47 amount stolen from Medicaid
- $1,253,920.47 restitution ordered to Medicaid
What compliance teams should check
- Review billing practices for Medicaid-funded residential care services, focusing on hours billed versus actual caregiver presence as highlighted in the Lordan Care Adult Family Homes case.
- Assess staffing levels and incident reports for adult family homes to identify patterns of understaffing and frequent police contact similar to those found in this DOJ case.
- Cross-check claims for one-on-one care and 24-hour supervision against actual staffing records to detect fraudulent billing typologies used by Lori Butts.
Why it matters
This case underscores the importance of robust internal controls and monitoring in Medicaid-funded programs to prevent and detect fraudulent billing practices. The DOJ’s prosecution of Lori Butts demonstrates that billing for unprovided services not only diverts critical resources from vulnerable populations but also exposes organizations to significant legal, financial, and reputational risks. Compliance officers must ensure that claims for government healthcare programs are accurate and verifiable, as enforcement agencies are intensifying efforts to identify and punish fraud.
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