Houston hospital administrator sentenced to 40 years for $116 million fraud scheme

A South Texas judge is not showing leniency when it comes to sentencing those involved in a mental health fraud scam involving 10 individuals that have pleaded guilty or been convicted.

Last week, the first of three hospital administrators scheduled for sentencing received 40 years in prison and was ordered to pay more than $31 million in restitution for his role in the $116 million scheme, according to a Department of Justice (DOJ) statement.

Mohammad Khan, the former assistant administrator at Riverside General Hospital in Houston, pleaded guilty to his role in the scheme in 2012. Khan admitted that he helped submit claims for partial hospitalization programs (PHPs) for services that were never provided. He also paid patient recruiters and owners of assisted living homes to refer patients to the hospital's clinics for outpatient mental health services, FierceHealthcare previously reported.

The extended prison sentence does not bode well for the other executives awaiting sentencing, including former president and CEO of Riverside General Hospital, Earnest Gibson III, and his son, Earnest Gibson IV, who operated one of the hospital's PHPs. The three executives, along with other co-conspirators, billed Medicare for psychiatric services when patients were actually watching television or never entered a PHP at all, FierceHealthPayer: AntiFraud previously reported.

In December, the Wall Street Journal revealed that Rep. Sheila Jackson Lee (D-Texas) contacted Centers for Medicare & Medicare Services Administrator Marilyn Tavenner after CMS blocked payments to the hospital for submitting claims for patients that weren't being treated. Months later, Gibson III was arrested on fraud charges.

For more:
- read the DOJ statement

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