An American nurse practitioner from India was sentenced to 20 years in federal prison after he was found guilty of healthcare fraud to the tune of $52 million.
Reddy was accused of attempting to defraud Medicare and was sentenced to 20 years on May 25.
Court documents stated that Reddy, a nurse practitioner, hatched a scheme to overcharge Medicare, Blue Cross Blue Shield of Texas, Humana, Signa, UnitedHealthcare and Aetna.
Federal prosecutors said the nurse practitioner created fake patient bills with the provider number of six doctors as the treading physicians on the documents, even though they didn’t do the services.
Federal Agent Investigation Began in June 2019
In June 2019, DOJ agents investigated one of his medical clinics and found that his staff was producing fake medical records. After the federal agents finished the investigation, Reddy shut down the clinic and left the business
A few days after he closed his clinic, he made several illegal wire transfers totaling $55 million. An analysis of the transfers determined the money was related to his healthcare fraud.
Federal agents also at that time asked for medical records to prove Medicare claims were legitimate between January 2014 and June 2019. Reddy and his staff spent months making fake medical records to hand to federal agents.
Reddy pleaded guilty to healthcare fraud and wire fraud last year. He will be required to reimburse all parties the $52 million over the rest of his life.
HHS Office Of Inspector General Makes Statement
Miranda Bennett of the HHS Office of Inspector General Dalla Regional Office noted that Trivikram Reddy stole the identities of six doctors to steal taxpayer dollars from Medicare and other private insurance companies to enrich himself. He violated the trust that the public gives doctors and other healthcare providers.
She noted that the sentence last week is a message to criminal medical professionals that federal law enforcement will do all it can to root out waste, fraud, and abuse in the federal healthcare system.
Cigna Sues Texas Clinic For $2 Million
One of the private healthcare companies that Reddy defrauded was Cigna, and that entity filed a lawsuit last year claiming that three dissolved medical clinics defrauded the company through Medicare fraud.
The lawsuit was filed in the US District Court For The Northern District Of Texas Dallas Division. It claimed that Reddy falsely billed Cigna for $2 million healthcare claims that were for treatments that were never provided.
Reddy ran the three clinics that were named VCare Health Services, Waxahachie Medical, and Texas Care Clinic. They dissolved in June 2019, but Texas law states they can exist for 36 months after they are dissolved so they can defend their names if they are sued. Cigna sued them a few months after they closed.
Cigna alleges that when the three clinics were functioning as separate medical facilities, they had the same address and were shell companies. The insurer claimed that the companies falsified medical records and changed medical diagnosis codes to increase reimbursement rates.
Other Major Healthcare Fraud In The News
Another recent healthcare fraud case involved three being convicted of fraud in a $40 million Novus Hospice case.
Two medical directors and a nurse were convicted of healthcare fraud after they helped Novus Hospice Services steal money from Medicare.
The company submitted fake claims for hospice services as they gave kickbacks for referrals from healthcare providers. This violates HIPAA law to recruit beneficiaries. They also destroyed documents to conceal the fraud from the US government.
Novus Hospice also closed operations when they found out that federal investigators were looking into the case. However, they opened a new company and continued the fraud. They used the new company to bill Medicare for about $40 million for hospice services before the new company was shut down.
Medical Director Role Is Often Susceptible To Kickbacks
The federal government knows that the medical director role for clinics is the one that is most susceptible to kickbacks.
Doctors often act as medical directors for healthcare service providers and are meant to offer medical guidance to the company to guide the healthcare services offered.
The company compensates the doctor, they can be incentivized to refer patients for the healthcare services when they aren’t needed. Fraud cases may involve kickbacks to medical directors for referring more patients than needed.
In 2018, the Department Of Health and Human Services issued a fraud alert stating that doctors who enter payment arrangements including medical directorships must make sure the arrangement are in line with fair market value for services that doctors offer.