Mention “Medicare fraud” and everyone forms a different mental picture. Some folks think about patients abusing the national healthcare program to buy unnecessary pain medications. Others think of seedy urban medical clinics that round up homeless folks and provide them with unnecessary services. Illegal referral schemes are also a big source of Medicare fraud although they are much harder to detect unless you are an insider.
Medicare Fraud Case Against Juan Espindola M.D.
Last week a New Jersey doctor pleaded guilty to criminal charges for his part in a relatively small Medicare fraud scheme. Dr. Juan Espindola pleaded guilty to one count of violating the Federal Travel Act. His crime? Taking bribes to refer patient blood specimens to Biodiagnostic Laboratory Services (BLS).
Prosecutors said that BLS paid Dr. Espindola approximately $1500 per month to act as a “consultant.” The consulting fees were really a sham, however. Instead, the lab was paying Dr. Espindola to get his lab business.
According to court documents, BLS is an approved Medicare provider. It is allowed to perform diagnostic tests on patient blood samples. Between April 2011 and June 2012, Espindola received $15,000 in bribes from BLS. In return, he referred blood tests to the lab which was then able to bill $65,000 for those services.
Traveling to accept or pay bribes is a violation of the Federal Travel Act. Paying for healthcare referrals or taking payments in return for those referrals is also a violation of the federal Anti Kickback Statute. Most Medicare fraud prosecutions allege violations of the Anti-Kickback Statute, conspiracy or the criminal health care fraud statute. So why was Espindola charged with the Travel Act?
The case against Espindola was part of a much larger scheme. According to a statement from the Department of Justice, Espindola is the 41st guilty plea in connection with the BLS lab referral scheme. He is one of 27 doctors who have pleaded guilty.
Although Espindola is only alleged to have taken $15,000 in bribes, prosecutors say the bribery scheme orchestrated by Biodiagnostic Laboratories has resulted in over $100 million in payments to the company. We suspect that Dr. Espindola pleaded guilty to a Travel Act violation in return for his cooperation. (A Travel Act violation is punishable by no more than 5 years in prison. Medicare fraud is punishable by up to 10 years and even longer if a patient is harmed.)
Lab Referral Schemes Hurt Patients and Taxpayers
Congress has long said that healthcare professionals can not pay bribes or engage in referral schemes. Healthcare decisions should always be based on the best interests of the patient. Injecting money into the equation often means that decisions are swayed and become based on who pays the largest bribe or inducement.
A recent study looked at how physicians prescribed drugs. Even simple lunches purchased by pharmaceutical companies and offered to doctors resulted in a noticeable increase in prescriptions written for that company’s products.
While America gets ready to celebrate Independence Day tomorrow, Juan Espindola, a 58 year old physician from Clifton, New Jersey, is worried about losing his freedom and medical license… and for what? $15,000 from a lab company. He joins 26 other physicians in a similar predicament.
Whistleblowers, Illegal Referral Schemes and Cash Awards
Most Medicare fraud cases begin with a whistleblower, usually a concerned healthcare worker or billing clerk. Most whistleblowers step forward after observing years of greed and corruption. By filing a complaint under the False Claims Act, whistleblowers can earn up to 30% of whatever is collected from the wrongdoers. Although Juan Espindola may be a “small fish” in this case, overall prosecutors have already recovered $12 million relating to Biodiagnostic Laboratory Service’s bribery scheme.
If you have inside information about fraud involving a government healthcare plan and are tired of watching the greed, give us a call. Already our whistleblower clients have received over $100 million in awards. All inquiries are protected by the attorney – client privilege and kept strictly confidential.
For more information, contact attorney Brian Mahany at or by telephone at (direct). You can also view our healthcare fraud whistleblower information page.
MahanyLaw – America’s Medicare Fraud Lawyers