Here’s a roundup of recent fraud cases and sentencings announced by the Department of Justice (DOJ).
Texas doc sentenced in $54M Medicare scam scheme
A Texas doctor will serve 10 years and one month in prison and must pay more than $34 million in restitution for his role in a scheme to defraud Medicare by prescribing durable medical equipment (DME) and cancer genetic testing without seeing, speaking to, or otherwise treating patients.
Daniel R. Canchola M.D., 54, of Flower Mound, Texas agreed to electronically sign doctor’s orders for DME and cancer genetic testing that he knew were used to submit false and fraudulent claims to Medicare. From August 2018 through April 2019, Canchola received approximately $30 in exchange for each doctor’s order he signed authorizing DME and cancer genetic test orders that were not legitimately prescribed, not needed, or not used—totaling more than $466,000 in kickbacks. The doctor’s orders Canchola signed were used to submit more than $54 million in false and fraudulent claims to Medicare
Canchola prescribed DME and cancer genetic testing to Medicare beneficiaries who were targeted as part of telemarketing campaigns and at health fairs, and they were encouraged to submit to the cancer genetic testing and to receive the DME regardless of medical necessity, according to court filings.
In October 2022, Canchola pleaded guilty to a conspiracy to commit wire fraud.
Detroit pharmacy owner to serve two years in prison for role in $7M fraud case
A licensed pharmacist from Dearborn Heights, Mich. was sentenced to two years in federal prison for submitting claims to Medicare, Medicaid, and Blue Cross Blue Shield of Michigan fo r her role in a scheme to defraud health care insurers by submitting claims for pharmaceuticals that were not actually purchased.
In addition to the prison term, Zeinab Makki, 61, was also ordered to pay $6.9 million in restitution imposed of a forfeiture judgment of $6.9 million.
Makki was the pharmacist in charge from 2001 through 2021 at New Millennium Drugs and Western Wayne Pharmacy. She admitted that she led a scheme to defraud Medicare, Medicaid, and Blue Cross Blue Shield of Michigan by submitting claims for pharmaceuticals which New Millenium Drugs and Western Wayne Pharmacy did not actually purchase.
“This sentencing underscores our commitment to holding those who defraud federal health care programs accountable,” said Mario M. Pinto, special agent in charge of the U.S. Department of Health and Human Services Office of Inspector General, in the announcement. “Our agency remains dedicated to working with our law enforcement partners to identify and investigate fraud allegations.”
Arizona doctor sentenced to prison for health care fraud
Linh Cao Nguyen, M.D., 51, of Peoria, was sentenced to 24 months in prison for his role in a health care fraud scheme.
The DOJ said that over the course of several years, Nguyen took part in a plan to defraud various health care benefit programs, including Medicare, TRICARE, AHCCCS, Blue Cross Blue Shield, and UnitedHealthcare. As part of the scheme, Nguyen knowingly caused the submission of thousands of false billing claims. He also falsely created patient records to conceal and avoid detection of the fraud.
The fraudulent claims identified a medical doctor as the treating provider when, in fact, another provider such as a nurse practitioner, social worker, unlicensed psychology intern, or wound care nurse provided the service independently. By billing the medical service as if it were provided by a physician, Nguyen falsely inflated the amount his company received for the service.
The total loss to the insurance companies from Nguyen’s scheme was approximately $3.7 million. As part of his sentence, Nguyen was ordered to pay over $1.1 million in restitution to the private insurance companies. Nguyen also must pay over $2.5 million to the government in a separate civil agreement.
Tennessee business owner convicted of $35M fraud
A federal jury last week convicted a Tennessee business owner for fraudulently billing federal health care programs approximately $35 million for medically unnecessary injections, which were administered over the course of eight years to opioid-dependent patients.
According to court documents and evidence presented at trial, Michael Kestner, 72, of Nashville, at various times owned, operated, and managed pain clinics in Tennessee, North Carolina, and Virginia, which were branded under the name Pain MD. The trial evidence proved that Kestner, who is not a physician, pressured nurse practitioners and physician assistants employed by clinics in the Pain MD network to provide multiple back injections to many, if not most, patients who came to Pain MD seeking opioid treatment. Witnesses testified that patients who refused to accept regular injections risked being turned away from Pain MD and suffering withdrawals from their opioid medication.
The injections were uniformly billed as Tendon Origin Insertion injections (TOIs), even though almost none of these patients were diagnosed with pain in their tendons, and in many cases, it would have been medically impossible to administer TOIs with the equipment available to the practitioners. The DOJ said that Kestner relentlessly pressured the providers at his clinics to administer and bill for injections.
To keep billings up, Kestner sent regular emails ranking the practitioners’ “production” against one another, criticizing providers for “below average” performance, and otherwise making providers feel they would lose their jobs or let down their clinic staff if they did not perform an increasing number of injections. He ignored repeated notices—including a lawsuit from insurance companies alerting him that his clinics were billing these injections improperly. Through these practices, Pain MD became Medicare’s single highest biller of TOI procedures in the country, outranking the next highest biller by eightfold.
The jury convicted Kestner of one count of conspiracy to commit health care fraud and 12 counts of health care fraud. He is scheduled to be sentenced on Feb. 27, 2025, and faces a maximum penalty of 10 years in prison for each count.