Sunday, August 15, 2010

New York AIDS Physician And 8 Others Charged With Distributing Oxycodone And Medicaid Fraud: What Can A Physician Who Practices In Low-Income Areas Learn From This Case?

On August 12, 2010, the Manhattan U.S. Attorney unsealed charges against Manhattan physician Diana Williamson, who ran an AIDS clinic and primary practice in Harlem, and eight others and described them as being part of a "drug ring" that allegedly distributed thousands of oxycodone pills obtained through Medicaid fraud.  Four search warrants were executed on the same day including one on Dr. Williamson's Harlem community clinic where they seized her computer and a reported 16 boxes of records. 

A Complaint is only an accusation is not evidence of guilt. Dr. Williamson and the other defendants are  presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

According to the Complaint and other documents filed in Manhattan federal court the allegations are as follows. Between September 2009 and August 2010, Dr. Williamson, a primary care physician, allegedly wrote oxycodone prescriptions to patients who had no legitimate need for the medication. Co-defendant Lenny Hernandez allegedly recruited the individuals to obtain oxycodone prescriptions from Dr. Williamson.  He also allegedly helped the individuals fill the prescriptions and arranged to resell the oxycodone to third parties.

It was then alleged that three other named defendants—Miguel Angel Hernandez, Franmi Saeta and Ivette Arroyo assisted Lenny Hernandez in obtaining and distributing oxycodone pills. Finally, it was alleged that Medicaid beneficiaries Antonio Martinez and Carl Guilford obtained oxycodone prescriptions from Dr. Williamson—despite having no medical need for the medication—then used their Medicaid-provided health benefits to fill their prescriptions and sold the pills to defendants Lenny Hernandez and Dr. Williamson.

It is alleged that records obtained from the New York State Office of the Medicaid Inspector General show that in just over 11 months that Dr. Williamson wrote Oxycontin prescriptions billed by the pharmacies to Medicaid worth $997,128. The total amount of all Medicaid prescriptions that Dr. Williamson wrote was allegedly worth $4,392,832 -- which means that the Oxycontin prescriptions made up almost 25 percent of the Medicaid prescriptions in value. It is alleged that analysis of patient prescription data and surveillance during the course of the investigation established that approximately 11,000 oxycodone pills were obtained and distributed during this time period.

Dr. Williamson and all the other defendants each are charged with one count of conspiracy to distribute and possession with the intent to distribute a controlled substance, which carries a maximum penalty of 20 years in prison and maximum fine of $1,000,000. Dr. Williamson and defendants Lenny Hernandez, Martinez and Guilford  each are also charged with one count of conspiracy to commit health care fraud, which carries a maximum penalty of 20 years in prison and a maximum fine of $250,000. These maximum sentences are rarely handed out and sentencing in federal cases is complex.

Attorney Commentary

What can a physician who is not part of an alleged "drug ring" learn from this case?

First, in low-income areas where a high percentage of patients are Medicaid/Medi-Cal, it is critical to be street smart and understand that patients will seek prescriptions for drugs and medical equipment for resale purposes. Thus, a physician who simply prescribes pain medications or other medications or DME that can be sold on the street can seemingly be implicated when he or she writes the prescription. It is therefore critical to know one's patients and not write prescriptions where medical necessity could be subjective if the drug or DME being sought is something that has resale value. A physician in a low-income clinic needs office staff that can be gatekeepers and help protect the office from patients that want to take advantage of the system.  For example, there could be a patient with an AIDS diagnosis who seeks prescription medications and then resells them on the street.

Second, physicians who have a significant Medi-Cal/Medicaid practice need to be extremely careful with marketing. Often the marketers will bring in patients, pay them to come into the offices and tell them what to say in order to obtain the services desired (obtain prescription for Oxycontin) and then offer to buy the drugs from them once the prescription is filled. It is easy to imagine a physician who gets caught up in one of these "schemes" simply because they have been working with some unscrupulous marketing.

My experience has been that the marketers in the vast majority of the cases never tell the physicians what is going on at the marketing level because the marketers are going to make money with the same patient by getting marketing from the pharmacy or from selling the prescription drug or DME obtained by the patient. The marketing is often what drives these illegal schemes and when it all comes out, the physician appears to have been willfully ignorant or the evidence is so overwhelming that no one will believe that the physician did not know what was going on with the prescriptions. 

Third, marketing that does not comply with federal and state rules is a short term solution to making the practice profitable. Most of the marketing that is done in these type of cases violates the Stark and Anti-Kickback statutes. Physicians need to remember that if illegal marketing is done, then all the billing done for the patients who were recruited will be deemed false claims. It has been difficult for clinics to survive in this economy but the improper marketing has great risks inherent especially where the government is being billed.

Fourth, physicians with Medicare and Medicaid/Medi-Cal practices need to have compliance plans. To risk one's medical license and criminal prosecution if regulatory rules are violated is foolhardy. Ignorance of these rules with respect to marketing is not usually a viable defense. Consulting an experienced health care attorney and being compliant with the rules is important for remaining in the health care business in the long run. It is much more affordable than hiring an attorney during an audit, Medical Board investigation or criminal investigation.

Posted by Tracy Green, Esq. Please email Ms. Green at or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.

Any questions or comments  should be directed to Tracy Green, a very experienced California health care fraud attorney, prescription fraud attorney, California physician attorney, and California Medi-Cal fraud attorney at

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and in health care fraud related matters in California and throughout the country. Their website is:


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