Hospital execs, docs charged in $40M kickback scheme

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Executives, physicians and others affiliated with a Dallas-based hospital have been indicted in a $40 million kickback and bribe scheme.

Executives, physicians, investors and other people affiliated with a now-shuttered hospital in Dallas have been indicted in a “massive conspiracy” that prosecutors say involved $40 million in bribes and kickbacks for patient referrals.

An indictment unsealed late last week shows that 21 individuals are facing various felony charges for their alleged role in the scheme that involved the physician-owned Forest Park Medical Center (FPMC), according to an announcement from U.S. Attorney John Parker of the Northern District of Texas.  

“The charges announced today show that the government will not tolerate corrupt practices by medical providers motivated by greed,” said Dallas FBI Special Agent in Charge Thomas M. Class, Sr.

FPMC in Dallas, which closed its doors in 2015, was founded on the strategy of maximizing profits for physician investors by initially refusing to join insurance plans’ networks, thus drawing high out-of-network reimbursement rates, the announcement says.

The hospital’s owners and managers are accused of using various businesses to funnel bribe and kickback payments to surgeons, primary care physicians, chiropractors, lawyers, worker’s compensation preauthorization specialists and others in exchange for referring patients to the facility who had high-reimbursing insurance benefits. People affiliated with FPMC also allegedly attempted to “sell” unwitting Medicare and Medicaid beneficiaries with lower-reimbursing coverage to other facilities in exchange for cash.

Surgeons who received bribe and kickback payments in exchange for referrals, meanwhile, “spent the vast majority of the bribe payments marketing their personal medical practices, which benefitted them financially, or on personal expenses, such as cars, diamonds and payments to family members,” the announcement says.

In all, health plans and government benefit programs were billed more than $500 million as a result of the bribes and kickbacks, and FPMC collected more than $200 million in “tainted and unlawful claims.”

Another fraud and kickback scheme, totaling $16 million, resulted in charges filed in October against two former executives at an Indiana nursing home chain. Prosecutors say they conspired with other associates to have vendors overcharge for their services, then used the proceeds to buy lavish items like lakefront property, Rolex watches and gold bullion and coins.