Tuesday, January 5, 2016

Non-Physician Owner of Three Los Angeles Medical Clinics Sentenced to 78 Months in Federal Prison for Medicare Fraud. Long Sentences Are The New Norm for Health Care Fraud.

The former owner and operator of three medical clinics located in Los Angeles, Hovik Simitian, 48, was sentenced on January 4, 2016 to 78 months in prison for his role in alleged submission of more than $4.5 million in fraudulent claims to Medicare. He is not a physician and under California law it is not legal for him to own or control the medical clinics. This was a high sentence given that it was a plea but is indicative of the government's position in demanding long sentences in these federal cases.  

The sentence was after Mr. Simitian pleaded guilty to one count of conspiracy to commit health care fraud on Aug. 18, 2015, and was sentenced by U.S. District Court Judge Beverly Reid O’Connell of the Central District of California, who also ordered Simitian to pay over $1.6 million in restitution to Medicare.

Mr. Simitian allegedly owned and operated Columbia Medical Group Inc., Life Care Medical Clinic and Safe Health Medical Clinic, three medical clinics in Los Angeles.  In connection with his guilty plea, Mr. Simitian admitted that from approximately February 2010 through June 2014, he and his co-defendant Anahit Shatvoryan paid illegal cash kickbacks to patient recruiters who brought Medicare beneficiaries to the clinics.  

Mr. Simitian also admitted that he and his co-conspirators then billed Medicare for lab tests and other services that were not medically necessary or were not actually provided to the Medicare beneficiaries, which they supported with false documentation they created.  

Mr. Simitian admitted in his plea agreement that he submitted a total of $4,526,791 in false and fraudulent claims to Medicare and Medicare paid $1,668,559 on those claims.

Co-defendant Anahit Shatvoryan was sentenced to 51 months after a plea agreement. This was a high sentence considering it was with a 5k1.1 motion by the government for downward departure and acceptance of responsibility.  

Attorney Commentary: The special unit and aggressive prosecution of Medicare fraud cases continues. Once the Indictments are filed, the plea negotiations have been difficult and the sentences offered high. Where there are good facts, it may be better to take the cases to trial given the government's position that all billing is fraud. This may have been a weak case but the long sentence even with a plea and in the co-defendant's case with cooperation is an indication that these cases need to be evaluated as early as possible in order to determine defenses and risks following Indictment and trial.

Posted by Tracy Green, Esq.


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