Opinion ID: 752178
Heading Depth: 3
Heading Rank: 1

Heading: Personal Use of Medicare-Reimbursed Airplanes

Text: 8 First American owned, leased, or borrowed several airplanes, including a $2.8 million King Air jet, that its executives used for business travel. Aetna policies did not prohibit reimbursement of the corporate airplane costs. Aetna was skeptical, however, that corporate planes were a fiscally prudent way to fill First American's travel needs. In 1990, following the purchase of the King Air, Aetna agreed nonetheless to reimburse First American for its plane installment payments, provided that at least 90% of the plane's flight time was reimbursable, patient care-related travel. Aetna also consented to reimburse expenses such as maintenance and pilot salaries prorated to the percentage of time spent on business travel. In 1991, Aetna demanded and First American agreed to provide further documentation of the planes' use so that Aetna could measure the reimbursable use of the planes. That documentation included records of the purpose, passengers, length, and destination of every flight. 9 During and after these discussions with Aetna, Jack and Margie took First American planes on dozens of personal trips--twelve round trips alleged in the indictment, 72 total found by investigators--that included visiting their mothers, sunning in Cozumel, viewing prefab columns in Dallas that they wished to incorporate into their new mansion, and attending their high school reunions and sports events like Auburn University football games. 4 They also transported non-First American-related passengers, including their children, both Millses' mothers, then-Governor of Alabama Jim Folsom, Georgia Speaker of the House Tom Murphy, and University of Georgia football coach Vince Dooley. 10 The costs allocable to this personal use would not have been reimbursable, of course, under the arrangement with Aetna. If this use rose over 10% of total flying time, moreover, it threatened reimbursement for the King Air payments. First American, at Jack's direction and with the cooperation of the chief pilot, Jim McManus, therefore undertook to disguise and conceal personal use. They used several methods. First, passengers with no business purpose for traveling would not appear on passenger manifests--so-called ghost passengers. Second, pilots would pull a circuit breaker to prevent the planes' hour meter from adding the flight time during personal flights to the planes' total flight time; thus, these breaker or ghost flights would not lower the percentage of patient care-related flight time. Many breaker flights left no trace in company records, although First American employees would schedule the flights on Post-Its, some of which were in evidence, inserted in the airplane schedule book. Other breaker flights were listed in the company flight log with false or omitted destinations. Yet another method for concealment had pilots pad their Medicare-reimbursable expense reports with extra meals to recover expenses incurred during these breaker flights. First American rounded out the scheme in 1991 meetings with Aetna auditors about documentation; there, Jack and First American's counsel, Wayne Phears, denied knowing of breaker flights 5 and indeed berated Aetna for not trusting First American's records.