Originally published by John Floyd.
A Houston anesthesiologist was recently convicted a second time of health insurance fraud following a guilty plea. Besides the prison sentence, the anesthesiologist was also ordered to pay $82.9 million in restitution for the fraud he committed.
This marks one of the highest restitution orders in U.S. history.
The Houston anesthesiologist committed two types of crimes: taking kickbacks and overbilling. These are the two most common types of health insurance fraud, and Texas them seriously with stiff penalties.
What Are Kickbacks?
Kickbacks are a type of bribe. Many bribes are paid upfront for some sort of service or access to goods and products. Kickbacks are more often a long-term type of bribe. Instead of being paid an upfront payment for a one time service, the kickbacks are paid every time an action is performed or a product is accessed.
Kickbacks in health insurance fraud almost always consist of financial remuneration. The Houston anesthesiologist worked with several accomplices to offer surgeons kickbacks to refer patients to their hospital.
In particular, they target patients with out-of-network insurance, which often reimburses hospitals more thoroughly than other insurance programs. In exchange, they pay surgeons kickbacks for every referral, disguised as “marketing money” or “consulting fees.”
Kickbacks are illegal because they lead to patients paying more for less healthcare services (often services not rendered) or services of lower quality. Instead of referring patients to the best care or the cheapest option, the surgeons are incentivized to refer them somewhere else.
The Anti-Kickback Statute was put in place specifically to prevent this from occurring in the healthcare field.
What Is Overbilling?
Overbilling is important to most kickback schemes. In order to commit fraud and make a profit, they need to charge patients and their insurance providers more than the services received cost.
Overbilling can include charging for services not rendered, inflating prices of goods and services, ignoring co-insurance, or writing off “discounts” as bad debt.
That’s exactly what the Houston anesthesiologist did. He and his accomplices gave patients discounts but charged their insurance carriers full price.
The funds from this overbilling were split between the surgeons who referred them patients and the group committing fraud.
Penalties for Overbilling and Kickbacks
Health insurance fraud is both a state and a federal crime and penalized accordingly. A single false health insurance claim can lead to up to 10 years in federal prison.
The fact that the Houston anesthesiologist is facing 5.5 years is surprisingly lenient and is likely connected to his guilty plea.
Fines Associated with Health Insurance Fraud Convictions
Health insurance fraud offenses entail significant fines as well. Knowingly making a single false statement in a Medicare/Medicaid claim can lead to a fine up to $250,000 for an individual, or $500,000 for an organization. This can quickly add up to millions of dollars if an entity is regularly making false claims.
Paying Restitution to Fraud Victims
Finally, a conviction for health insurance fraud includes paying restitution. This can include not only the amount of money overbilled to insurance providers, but also for attorney fees and the cost of the investigation leading up to the conviction. Many restitution orders exceed a million dollars, even in smaller-scale fraud schemes.
Health insurance fraud is the theft of funds that were intended to help people heal. The penalties for these convictions are appropriately severe. If you or a loved one has been accused of committing health insurance fraud, you should reach out to a qualified Texas attorney today to start planning your defense.
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