Healthcare Hotbed for Fraud Cases

While it might surprise some folks that five Modesto doctors are among those facing fraud charges in a $40 million medical billing and kickback case based in Southern California, it shouldn’t surprise anyone that there was yet another medical fraud case.

Wherever there is money, you’ll find people or institutions are that ripe for defrauding, and the health care industry is susceptible on many fronts. Providers work the system to stick it to insurers, including the government. Insurers stick it to patients through higher premiums and denied claims. Pharmaceutical companies charge ridiculous amounts of money for prescription drugs, driving up higher care and insurance costs. Those, along with patients who refuse to pay their due, drive up medical costs for everyone. And if you don’t have coverage but can afford to pay the hospital, you don’t get the same discounts as the insurers get. You pay the full exorbitant price.

Among the local physicians named in the complaint, Jonathan Louis Cohen, 57, John Joseph Casey Jr., 65, and William Louis Pistel, 53, are from Modesto and with the Stanislaus Orthopaedic and Sports Medicine Clinic, while another, Mohamed Adly Ibrahim, 40, is affiliated with that same clinic but lives in Danville. Authorities also charged Modesto physicians Jerome Anthony Robson, 68, and Robert Edward Caton, 65.

Caton and Robson are accused of receiving $175,000 apiece in kickbacks, with the four Stanislaus Orthopaedic and Sports Medicine Clinic physicians allegedly getting a combined $248,000 in kickbacks. Charged with conspiracy to commit medical insurance fraud; filing false and fraudulent claims; taking rebates for patient referrals; and insurance fraud, they remain innocent until proven guilty.

That stated, the outcomes of fraud cases almost always hinge on whether the paper trails and specifically the money trails are damning and irrefutable..

The Association of Certified Fraud examiners in 2012 rated health care as the fourth most-defrauded industry in the U.S., accounting for 6.7 percent of all fraud cases filed. The winner? Banking (a gimme) at 17 percent, followed by government at 10.3 due its “sheer size and number of employees,” and manufacturing at 10 percent.

That same agency identified the major ways health care fraud is committed. The list includes billing for services not rendered or for a noncovered service as a covered service, fudging the dates, locations and providers of service, waiving deductible or co-pays, falsifying the reporting of diagnoses or procedures, performing unnecessary procedures, prescribing drugs unnecessarily and, finally, kickbacks and bribery. The last two are among the allegations in the case involving the Modesto physicians.

In 2015, the FBI cracked a $712 million Medicare fraud ring, arresting 243 people for billing for care that either wasn’t needed or never provided. That same year, a pharmacy owner in Florida bilked Medicare for $20 million, which financed his new Bentley and more than a few oil changes.

In what was dubbed “Operation Spinal Cap,” a hospital official and two surgeons in Long Beach were charged with billing $600 million in fraudulent charges.

The case announced Thursday certainly wasn’t the first involving Modesto physicians or organizations.

In 2004, the state filed felony charges against 20 dentists working at Hatch Dental Clinics in Modesto, Ceres and Stockton. Their crime? Overbilling by overdrilling. The company’s husband-and-wife owners ultimately got a year each in jail and had to repay $3 million to Medi-Cal.

A year earlier, a Redding hospital and its parent company, Tenet – which owns Doctors Medical Center in Modesto and Doctors Hospital in Manteca – paid $54 million to settle claims that two of its doctors performed unnecessary heart surgeries.

After news broke Thursday of the complaints involving the Modesto physicians, we received calls and posts on social media from people who simply didn’t believe it. They are good people and good physicians, some commented.

And indeed, they all might be fantastic doctors. But those aren’t the operating skills that concern the state in this case.

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Photo courtesy of: Modesto Bee

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