Saturday, January 16, 2016

Physician Assistant Sentenced To 14 Months In Prison For Accepting Illegal Kickbacks for Referring Patients to Home Health, Physical Therapy and Medical Clinics

The U.S. Attorney's Office is willing to prosecute criminal cases even where small kickback amounts are at issue. A recent Michigan case shows that even $1,000 kickback payments will be prosecuted.

On January 12, 2016, physician assistant Kyle D. Gandy, who formerly resided in Michigan, was sentenced to 14 months in prison and two years of supervised release for accepting $1,000.00 in illegal kickbacks for referring patients to medical clinics, physical therapy clinics, and a home health care agency. 

As part of this felony conviction, Mr. Gandy was ordered to pay $18,030.17 in restitution, representing the amount of the referred services paid by Medicare and Medicaid. 

PA Gandy will also face collateral consequences from the conviction from his licensing board and he will be excluded from participating with the Medicare and Medicaid programs for at least five years.

PA Gandy is the tenth person, and the fourth physician assistant, convicted of felony charges in connection with a joint federal-state investigation into a kickback scheme initiated by Babubhai Rathod who owned and operated health care companies and was sentenced to four years in prison back in 2013. 

In sentencing Mr. Gandy, U.S. District Judge Janet T. Neff stated that accepting kickbacks is "a very serious crime" that "take[s] advantage of government programs that help so many people." Judge Neff emphasized that receiving illegal kickbacks in any amount is a "strike at the whole [health care] system." Judge Neff further noted the need to punish and deter those who have "the education and opportunity to work in a dignified profession," but use such opportunities "to commit fraud and theft."

In its sentencing memorandum, the Government cited Mr. Gandy’s admitting the subject kickback payments influenced his referral patterns and resulted in services that were not medically necessary.

Attorney Commentary: This case is one of a long stream coming from a joint federal and state investigation after a civil qui tam case was filed by an employee who worked in Mr. Rathod's office. Numerous physicians, practice administrators, and physician assistants faced criminal prosecutions. The kickbacks at issue were in cash and checks disguised as bonuses, mileage, medical director and consulting services that were never performed.  

Posted by Tracy Green, Esq.
Office: 213-233-2260  


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