On February 12, 2009, three physicians and three non-physicians were indicted by a federal grand jury in Miami for conspiracy to commit health care fraud. This indictment was related to the billing and operation of Midway Medical, a Miami clinic that purported to specialize in treating HIV/AIDS by infusion treatment. The indictment alleges that the physicians at Midway Medical billed more than $10 million to the Medicare program for services that were medically unnecessary and not actually provided between September 2002 and June 2005. During that time frame, Medicare paid more than $4.8 million on those allegedly fraudulent claims submitted by Midway Medical.An indictment is merely a charge and defendants are presumed innocent until proven guilty.
The physicians indicted were: Carmen Lourdes del Cueto, M.D., 65, Roberto Rodriguez, M.D., 54, and Carlos Garrido, M.D., 69. Three non-physicians, Gonzalo Nodarse, 38, Alexis Carrazana, 41, and Alexis Dagnesses, 44, were also charged with conspiracy to launder health care fraud proceeds, as well as three counts each of substantive money laundering.
According to the indictment, the three physicians, del Cueto, Rodriguez and Garrido, were part-owners of Midway Medical. Midway Medical purported to be an infusion clinic that specialized in providing infusions and injections to HIV-positive patients. The indictment alleges that the physicians ordered medically unnecessary infusions and injections, and falsify medical records to make it appear that the HIV services were necessary. The indictment also alleges that many of the infusions or injections were never actually provided.
The indictment also alleges that medical assistants Nodarse and Carrazana assisted the physicians in falsifying the medical records to make it appear that the services were needed. As part of the scheme, Dagnesses is alleged to have manipulated HIV-positive blood samples in order to obtain laboratory reports indicating that the patients had illnesses that they in fact did not have.
The non-physicians are further charged with distributing the proceeds of the fraud through a series of financial transactions involving more that $10,000 in tainted funds. These are the money laundering counts which raise these defendants’ exposure to sentences of 50 years.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov. A Palm Beach Post article about this case can be found at:
http://www.palmbeachpost.com/localnews/content/state/epaper/2009/02/17/0217fraud.html
Commentary: In this case, we see several common fact patterns that occur in health care fraud cases.
First, in Florida, medical clinics do not need to be owned by physicians. Where non-professionals are owners and operators of medical providers, there appears to be a higher incidence of fraud. For those unlicensed, there is no risk of losing a medical license that one has worked for years to obtain. In California, there is a higher incidence of fraud where non-physicians are operating or managing the health care provider. Medicare and Medi-Cal / Medicaid are targeting health care providers that have non-professional owners and managers since it is a red flag of potential fraud or abuse. For physicians, nurses or physician assistants, they need to be careful when working at facilities that are owned by non-professionals.
Second, the physicians were not charged with money laundering or structuring. This indicates that the non-physicians were controlling the money. The money laundering allegations are serious and raise the potential sentences in these cases significantly. The highest potential sentence for the physicians is 10 years since they were not charged with money laundering which raises the exposure to 50 years.
Third, the government is getting tougher on physicians. Two of the physicians here are older than 65. This often indicates retired or older physicians that may have been recruited. It used to be that the government considered certain physicians to be “victims” of the scheme where they did not realize what was going on at the clinic. The government is now more aggressive in charging physicians. Further, once one of these cases are charged and the depth of fraud is exposed, it is hard to prove that the physician did not know what was going on around him or her. The physician or licensed professionals cannot stick their head in the sand. When faced with problems at these clinics, the physicians need to get solid legal advice on how to proceed.
Fourth, this is a case based on facts that occurred on a clinic that stopped billing over 4 years ago. Remember, the government works on history and the statute of limitation in health care fraud is lengthy. If there has been an investigation, do not assume that nothing will be charged just because several years have passed.
Second, the physicians were not charged with money laundering or structuring. This indicates that the non-physicians were controlling the money. The money laundering allegations are serious and raise the potential sentences in these cases significantly. The highest potential sentence for the physicians is 10 years since they were not charged with money laundering which raises the exposure to 50 years.
Third, the government is getting tougher on physicians. Two of the physicians here are older than 65. This often indicates retired or older physicians that may have been recruited. It used to be that the government considered certain physicians to be “victims” of the scheme where they did not realize what was going on at the clinic. The government is now more aggressive in charging physicians. Further, once one of these cases are charged and the depth of fraud is exposed, it is hard to prove that the physician did not know what was going on around him or her. The physician or licensed professionals cannot stick their head in the sand. When faced with problems at these clinics, the physicians need to get solid legal advice on how to proceed.
Fourth, this is a case based on facts that occurred on a clinic that stopped billing over 4 years ago. Remember, the government works on history and the statute of limitation in health care fraud is lengthy. If there has been an investigation, do not assume that nothing will be charged just because several years have passed.
Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of individuals, businesses and licensed professionals and providers, with an emphasis on health care professionals.
