On May 8, 2009, a former doctor, William Wilson Hampton Jr., plead guilty to 47 felony counts, including insurance fraud, capping and conspiracy, and admitted that he performed hundreds of unnecessary surgeries on patients for money. The California Medical Board revoked his license to practice medicine last month. Hampton was sentenced by Superior Court Judge Frank F. Fasel to 16 years in prison. He also admitted to a sentencing enhancement that well in excess of $2.5 million was taken from the victims.
This sentence appeared to be a practical decision since Hampton, who performed surgeries out of the now closed Unity Outpatient Surgery Center ("Unity") in Buena Park, is currently serving a 10-year term in federal prison in a companion case and the state sentence will run concurrently with the federal one. In the federal case, Hampton took the case to trial, lost in a jury trial for a violation of 18 U.S.C. Section 1347, health care fraud arising out of billing private insurers from a private outpatient surgery center that was paying kickbacks to patients.
Hampton's case is part of a larger case with 19 defendants pending in Orange County Superior Court. The alleged victims in the health care fraud were more than a dozen insurance companies such as Aetna, Blue Cross and Blue Shield, Healthnet and Cigna. In 2007, state and federal authorities charged Hampton and two other doctors with performing unnecessary surgeries for such things as sweaty palms, hemorrhoids or cysts on more than 1,000 healthy, insured patients. The patients were paid between $300 and $1,000 in cash to undergo surgical procedures that were billed to their insurance companies, according to prosecutors.
According to his guilty plea, Hampton performed 180 surgeries during a three-month span on patients recruited by Unity marketers from across the country. The guilty plea form says Hampton met most of his patients on the day of the procedures or a few days before, and most of the surgeries were for thoracic sympathectomies (sweaty palms surgery), which involves cutting the nerves that stimulate the sweat glands and requires collapsing the lung.
Hampton and the other doctors Michael Chan and Mario Rosenberg are accused of performing 1,037 procedures, resulting in insurance billings exceeding $30 million for the facilities fees alone. Unity received over $5.1 million in payment as a result of the surgeries performed by these doctors. Doctors were accused of ignoring basic medical protocols such as: 1) Patients receiving surgeries on consecutive days instead of while under one anesthesia; 2) Doctors not meeting the patients prior to operating; 3) Doctors not following up with patients after the procedure was completed; and 4) Doctors not obtaining necessary medical information.
Co-defendant marketer Sue Nanda plead guilty on February 20, 2009, to 22 felony counts and is expected to be sentenced on June 1, 2009. Nanda allegedly recruited over 170 patients from 16 different states for unnecessary surgical procedures. Nanda, who had no medical training, recruited patients with PPO insurance, scheduled surgical procedures, and coached patients to correctly describe symptoms for the unnecessary surgical procedures. In exchange for undergoing surgery, the patients received a cash payment, usually between $300 and $1,000 per surgery, or credit toward a free or discounted cosmetic surgery.
Nanda assisted patients in filling out surgery center paperwork, including having them sign a false affidavit stating that they had not been offered compensation and had not received any compensation in exchange for using Unity’s services. For the marketing for Unity, Nanda was paid directly and through corporations she had set up. She will be ordered to pay restitution and over $400,000 in back taxes for personal and corporate taxes to CFTB.
The other six defendants in the Unity case pled guilty prior to the indictment and have been sentenced. The remaining 11 defendants are scheduled for pre-trial on June 5, 2009, at the Central Justice Center in Santa Ana.
