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Health Care Fraud: 21 Indictments in Forest Park Medical Center Case

Last Thursday here in Dallas, the seal on a November 16, 2016, federal grand jury indictment was removed.  The unsealed indictment’s revelations hit the medical community of North Texas (and probably the rest of the state) like a tsunami.



Forest Park Medical Center Fraud Indictment Unsealed

It’s the Indictment filed in Case No. 3-16CR-0516D in the United States District Court for the Northern District of Texas, Dallas Division.  There are twenty-one (21) defendants.

Many are physicians. Several are surgeons.  Several of these individuals are alleged to have been an owner, manager, or employee of Forest Park Medical Center (you may remember the FPMC hospital located on North Central Expressway here in Dallas).

If the continued media coverage is any indication, this is a big story that is just going to get bigger in the coming weeks and months.

You can read the complete document (44 pages) here, where it’s a part of my online library at Scribd.com.  Health Care Fraud Indictment FPMC et al by Michael Lowe, Attorney at Law on Scribd


What You Need to Know About the Forest Park Medical Center Prosecution

Here’s what you need to know about it, from a criminal law perspective:

Federal Prosecutors Allege Bad Things at Forest Park Medical Center

First of all, this is a federal prosecution that is going forward against almost two dozen defendants on alleged violations of federal law.  It’s a big case.

Undoubtedly, federal agents have been hard at work in the investigation phase of this case for a long time.  Not to mention the lawyers at the local U.S. Attorney’s Office.

They’re really, really serious.  Read the DOJ news release here.

Here is what they are alleging:

1.  Alleged Conspiracy between the Defendants

Right off the bat, they’ve alleged conspiracy here.  The allegations are that the 21 defendants “…and others known and unknown to the Grand Jury…” conspired to violate specific federal statutes and did so.  Indictment, pages 8-9, paragraph 43.

2.  Allegedly Conspired to Violate Federal Statutes

These allegedly violated federal laws are identified as: (a) 42 U.S.C. 1320a-7b (b)(1) ; (b) 42 U.S.C. 1320a-7b (b)(2); and (c) 18 U.S.C. 1952.  (I’ll discuss these laws later.) Indictment, page 9, paragraph 43.

3. Alleged Purpose: Make Lots of Money

The motive?  Money.  It’s alleged that the defendants did so in order to “unlawfully enrich themselves and others….”   Indictment, page 10, paragraph 44.

How much money?  According to the Indictment, Forest Park Medical Center (FPMC) billed “well over half-a-billion dollars and collected over two hundred million dollars” during the years 2009 to 2013.  Indictment page 2, paragraph 4.

4.  What They Allegedly Did: Paid Bribes and Kickbacks

According to the Indictment, these 21 individuals made lots of money from insurance claims.  How?

…[T]hrough the submission of private, out-of-network insurance claims, and FECA and TRICARE claims, for services provided to beneficiaries at FPMC [Forest Park Medical Center], which had been induced by bribe and kickbacks paid, or promised to be paid, to surgeons, primary care physicians, chiropractors, lawyers, workers’ compensation preauthorization specialists, and others.”  Indictment, page 2, paragraph 2.

5. Why? Allegedly to Get Referrals of Patients with Certain Kinds of Insurance Coverage

The Indictment describes “approximately $40 million” in bribes and kickbacks being paid in order to get these people to refer “certain patients” to FPMC.   Indictment, page 2, paragraph 2.

Which patients?  “Those patients were primarily ones with high-reimbursing, out-of-network private insurance benefits or benefits under certain federally-funded programs.”   Indictment, page 2, paragraph 2.

Allegedly, “at the same time,” patients with “lower-reimbursing insurance coverage, namely unwitting Medicare and Medicaid beneficiaries,” were to be sold to “other facilities in exchange for cash.” Indictment, page 2, paragraph 4.

Health Care Fraud: The Complexities of the Forest Park Medical Center Case

It’s a complex scenario that is described by the federal indictment.  Not only are there 21 individual defendants named in the initial indictment, but the facility isn’t just one hospital or medical center.

FPMC was a chain of swanky hospitals here in Texas.   FPMC had facilities here in Dallas and Fort Worth, as well as San Antonio, Southlake, and Frisco.   It wasn’t successful.

See D Magazine, “The Shocking Collapse of Forest Park Medical Center,” published last month and  the March 2016 article in the San Antonio Express News, “San Antonio’s Forest Park Medical Center building sells at foreclosure,”  describing how that hospital site failed to have any bids at its foreclosure auction.

Moreover, all these bad acts allegedly took place over several years.  It gets even more complicated when you consider the variety of professionals named as defendants.  (See pages 4-7 of the Indictment.)

Respected Professionals Have Been Accused

First, there are the doctors.  There are several well-known and well-regarded physicians named as criminal defendants.

It’s shocking to read the names here. They include spinal surgeons, bariatric surgeons, a pain management doctor, and an anesthesiologist.

Then there are those that worked for FPMC in hospital management.  Add to that an owner of an advertising agency, and several investors in FPMC.  Owners of clinics and hospital consulting companies are listed as defendants here, too, as is a chiropractor alongside a worker’s compensation preauthorization specialist.  And, of course, there’s a lawyer in the defendant mix (a worker’s compensation attorney).   Shell companies are discussed.  Ditto, real estate corporations.

Then there’s the mass of facts that describe a huge bribery scheme.  Doctors are alleged to have taken millions in order to buy things like cars or diamonds as well as to pay for marketing their practices.

Serious Felonies with Serious Sentences

If the prosecution is successful here, then these defendants will face many years behind bars in addition to huge monetary fines.  These are serious federal felonies that have been charged in this indictment.  With federal felonies comes federal sentencing – which is much different than sentencing in a Texas court.

Dr. Richard Beauchamp, for example, is charged with 10 counts of offering or paying and soliciting illegal remuneration; 7 counts of violating the Travel Act; and 2 counts of conspiracy to commit money laundering.

If he is convicted, then he can be sentenced to a maximum of 125 years behind bars and fines of $2.25 Million.  That’s just one example.

Health Care Fraud

So, now that we’ve gone through the indictment, what is this all about?  It’s the FBI and the Justice Department going after doctors, and assorted other defendants, for health care fraud.

There are several different kinds of health care fraud.   The Centers for Medicare and Medicaid Services identify five different types of health care fraud:

  1. Medical Identity Theft;
  2. Billing for Unnecessary Services or Items;
  3. Billing for Services or Items Not Furnished;
  4. Upcoding; and
  5. Kickbacks.

Justice Department’s Longstanding Focus on Health Care Fraud

Healthcare Fraud has long been considered a “growing problem in the United States” by the Department of Justice and it was made one of the DOJ’s “top priorities” back in 1993.  See the United States’ Attorney General Manual (Section 9-44.100).

It’s considered a threat to every citizen and to the national economy.  From the Office of the U.S. Attorneys’ Criminal Resource Manual:

Health care fraud imposes an enormous cost to the health care system and to our nation’s economy as a whole. While no one has an exact figure, the General Accounting Office estimates that health care fraud, waste and abuse may account for as much as 10 percent of all health care expenditures. Health care expenditures now exceed one trillion dollars each year, so that more than $100 billion may be lost in fraud, waste and abuse annually. Health care fraud also undermines both the cost and quality of health care provided to patients.


Texas Health Care Fraud Arrests

The federal authorities do pursue health care fraud cases here in Texas; FPMC is not an anomaly.

See, for example, the $9.6 Million federal conviction over in Houston about six weeks ago, described in the Insurance Journal article, “Jury Convicts Houston Execs in Healthcare Fraud Scheme.”  And then there was the recent plea deal in a Dallas health care fraud case involving Medicare.  See, “5 in Dallas area guilty of health care fraud” in the North Dallas Gazette.

As a Texas criminal lawyer who represents defendants accused of health care fraud, it is not surprising to me to read of this major criminal indictment of some noted medical personalities in our area.

Especially in this case; after all, Dr. Toussaint was already convicted of $10,000,000 in health care fraud by a federal court here in Dallas back in March 2016.  The jury found him guilty on all seven counts.   That case involved claims he filed false insurance claims to various insurance companies (like Cigna, Blue Cross Blue Shield, etc.).

Texas can expect the Justice Department (and FBI, etc.) to continue investigating and prosecuting health care fraud – and the bigger the case, with the more millions of dollars involved, the better from their perspective.


For more information, check out our web resources and Michael Lowe’s Case Results as well as his 2013 article, “Medicare Fraud Sting Operations By Federal Government Includes Senior Volunteers Spying On Doctors And Health Care Providers: Expect To See More National Stings And Sweeping Arrests Of Medical Pros In The Future.”


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