Ten people have been charged in a 1.4 billion dollar rural healthcare billing scheme that includes a northern Missouri hospital.
The individuals, including hospital managers, lab owners, and billers, are accused of participating in a scheme using rural hospitals in several states, including Missouri, as billing shells to submit false claims for lab testing.
State Auditor Nicole Galloway released an audit in 2017 showing Putnam County Memorial Hospital in Unionville was targeted and had about 90 million dollars in inappropriate lab billings. Most were for patients who had never been to or received services from the healthcare provider. Galloway then turned over audit records and information to state and federal authorities.
The indictment alleges that from approximately November 2015 through February 2018, the conspirators billed private insurance companies approximately $1.4 billion for laboratory testing claims as part of this fraudulent scheme, and were paid approximately $400 million.
Jorge Perez, 60, of Miami-Dade County, Florida; Seth Guterman, 54, of Chicago, Illinois; Ricardo Perez, 57, of Miami-Dade County, Florida; Aaron Durall, 48, and Neisha Zaffuto, 44, each of Broward County, Florida; Christian Fletcher, 34, of Atlanta, Georgia; James Porter Jr., 49, of Marion County, Florida; Sean Porter, 52, of Citrus County, Florida; Aaron Alonzo, 44, and Nestor Rojas, 45, each of Miami-Dade County, Florida, were charged in an indictment filed in the Middle District of Florida.
All defendants (except Sean Porter) were charged with one count of conspiracy to commit health care fraud and wire fraud. In addition, Jorge Perez, Guterman, Ricardo Perez and Durall were each charged with five counts of substantive health care fraud; Durall and Zaffuto were charged with two counts of conspiracy to commit money laundering; Jorge Perez, Guterman, Ricardo Perez, Fletcher, James Porter, and Sean Porter were charged with one count of conspiracy to commit money laundering and the following defendants were charged with substantive money laundering: Durall (three counts); Zaffuto (one count); Jorge Perez (seven counts); Guterman (one count); Ricardo Perez (five counts); Fletcher (two counts); James Porter (12 counts) and Sean Porter (two counts).
Jorge Perez, Ricardo Perez, and Durall appeared this afternoon before U.S. Magistrate Judge Joel B. Toomey of the Middle District of Florida. Initial appearances for Zaffuto, Fletcher, James Porter Jr., Sean Porter, Aaron Alonzo, and Nestor Rojas are scheduled before Magistrate Judge Toomey on June 30 and July 1.
“This was allegedly a massive, multi-state scheme to use small, rural hospitals as a hub for millions of dollars in fraudulent billings of private insurers,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The charges announced today make clear that the department is committed to dismantling fraud schemes that target our health care system, however complex or elaborate.”
The indictment alleges that the conspirators would take over small, rural hospitals, often in financial trouble, using management companies they owned and operated. The conspirators would then bill private insurance companies through those rural hospitals for millions of dollars of expensive urinalysis drug tests and blood tests, conducted mostly at outside laboratories they often controlled or were affiliated with, using billing companies that they also controlled. While outside laboratories did most of these laboratory tests, the conspirators allegedly billed private insurance companies as if these laboratory tests were done at the rural hospitals.
According to the indictment, these rural hospitals had negotiated contractual rates with private insurers that provided for a higher reimbursement than if the tests were billed through an outside laboratory. Accordingly, the scheme used the hospitals as a shell to fraudulently bill for such tests. Further, the indictment alleges that the lab tests were often not even medically necessary. The conspirators allegedly would obtain urine specimens and other samples for testing through kickbacks paid to recruiters and health care providers, often sober homes and substance abuse treatment centers. The indictment also alleges that the conspirators engaged in sophisticated money laundering to promote the scheme and to distribute the fraudulent proceeds.
The rural hospitals involved in this case are Campbellton-Graceville Hospital (CGH), a 25-bed rural hospital located in Graceville, Florida; Regional General Hospital of Williston, a 40-bed facility located in Williston, Florida; Chestatee Regional Hospital, a 49-bed rural hospital located in Dahlonega, Georgia; and Putnam County Memorial Hospital, a 25-bed rural hospital located in Unionville, Missouri.