By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
Founders and investors of a physician-owned health care facility in Dallas, Texas, known as the Forest Park Medical Center, were charged in a bribery and kickback scheme on December 1, 2016. The range of felony offenses stem from their payment or receipt of roughly $40 million in bribes and kickbacks for referring patients to Forest Park Medical Center (FPMC), according to a federal indictment in Texas federal court.
21 Took Part In Conspiracy Scheme.
The indictment was returned by a federal grand jury in November 2016, identifying 21 defendants including executives, physicians, surgeons and other individuals associated with FPMC who allegedly took part in a bribery scheme that cheated federally funded health care programs and other insurance plans for their personal financial gain.
The defendants named included, Forest Park co-founder of FPCM, CEO Alan Andrew Beauchamp, anesthesiologist and president of its board of directors Richard Ferdinand Toussaint, Jr., surgeon and board of directors member Wade Neal Baker, and Forest Park managing partner and investor Wilton McPherson Burt. However, there were many others involved in addition to these few. It must be remembered that those named have been charged but have not been convicted in a court of law. Often in this type of case, a defendant is acquitted or dismissed.
FPMC was an out-of-network hospital. According to the indictment, the patients that were referred there were primarily ones with high reimbursing out-of-network private insurance benefits or benefits under certain federally-funded programs. FPMC’s owners, managers, and employees also tried to sell patients with lower reimbursing insurance coverage, namely Medicare and Medicaid beneficiaries, to other facilities in exchange for cash.
According to a press release from the U.S. Department of Justice, because FPMC is an out-of network hospital, it is free to set its own prices, resulting in a higher reimbursement rate than in-network providers.
Park Over Billed Patient’s Insurance Companies.
The indictment alleges that Forest Park billed patients’ insurance plans more than half a billion dollars and collected around $200 million in paid claims from 2009 to 2013 as a result of the bribes and kickbacks.
According to the DOJ, several co-defendants operated shell entities where the defendants funneled bribes and kickbacks payments though to surgeons in exchange for referrals.
“Medical providers who enrich themselves through bribes and kickbacks are not only perverting our critical health care systems, but they are committing a serious crime. Massive, multifaceted schemes such as this one, built on illegal financial relationships, drive up the cost of health care for everyone and must be stopped,” said U.S. Attorney John Parker of Texas’ Northern District in a statement.
FPCM Investors Referred Patients In Return For Kickbacks.
According to the indictment, primary care physicians who were investors in the facility and referred patients to FPCM for surgery and other specialized treatments received kickbacks ranging anywhere from $100,000 to $7 million. Those enriched funds where used to market their own personal medical practices or for personal goods and expenses.
There were several government health care programs that were affected by the alleged bribery scheme such as Tricare, The U.S Department of Labor’s FECA health care program, who was billed $25 million; the U.S. Department of Defense’s health care program, who was billed over $10 million; and federal and retirees FEHBP health care program, who was billed over $60 million.
Each of the defendants have been charges with one count of conspiracy to pay and receive health care bribes and kickbacks. This gives the defendants a chance to be sentenced to five years in prison and a $250,00 fine.
Others involved in the scheme have been charged with violating the federal Travel Act and aiding and abetting a conspiracy to commit money laundering.
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Lee, Suevon. “21 At Texas Med. Center Charged In Massive Bribery Scheme.” Law360. (December 1, 2016). Web.
Krause, Kevin. “Doctor-owners, Execs of Bankrupt Forest Park Hospital Chain Indicted In Massive Kick-back Scheme.” Dallas News. (December 2, 2016). Web.
“Executives, Surgeons, Physicians and Others Affiliated with Forest Park Medical Center (FPMC) in Dallas Indicted in Massive Conspiracy.” United Stated Department of Justices. (December 2, 2016). web.
About the Author: George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone: (407) 331-6620.
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