The Department of Justice U.S. Attorney’s Office Central District of California announced on February 28, 2018 that two California doctors, one of whom had his medical license revoked in 2009, have been arrested pursuant to a federal indictment charging them with mail fraud, wire fraud, false statements, money laundering, and aggravated identity theft arising from their alleged involvement in a scheme involving more than $250 million in allegedly fraudulent bills related to the 1-800-GET-THIN Lap-Band surgery business and sleep study programs between May 2010 and March 2016.
The federal indictment alleges that one of the defendant doctors controlled, in part, the GET THIN network of entities that focused on the promotion and performance of elective Lap-Band weight-loss surgeries. The defendant doctor is alleged to have established procedures requiring prospective Lap-Band patients, including those covered by insurance plans he knew would never cover Lap-Band surgery, to have at least one sleep study, and employees were incentivized with commissions to make sure the studies occurred. The federal charges allege that the purpose of the sleep studies was to find a second reason – a co-morbidity, such as sleep apnea – that GET THIN would use to convince the patient’s insurance company to pre-approve the Lap-Band procedure.
After patients underwent sleep studies (often with little indication that any doctor had ever determined the study was medically necessary), GET THIN employees, allegedly acting at the defendant doctor’s direction, allegedly often falsified the results of the sleep studies to reflect that the patient had moderate or severe sleep apnea, and that they suffered from severe daytime sleepiness. The federal indictment charges that the defendant doctor then caused those falsified sleep study reports to be used in support of GET THIN’s pre-authorization requests for Lap-Band surgery.
Insurance companies would then authorize payment for some of the proposed Lap-Band surgeries, relying on the false sleep studies as well as other false information, including patients’ heights and weights, according to the federal indictment. The federal indictment alleges that GET THIN received at least $38 million for the Lap-Band procedures.
The federal indictment alleges that even if the insurance company did not authorize the surgery, GET THIN still was able to submit bills for approximately $15,000 for each sleep study, receiving millions of dollars in payments for these claims.
The other defendant doctor is alleged to have allowed his electronic signature to be used by GET THIN to make it falsely appear that he had reviewed and interpreted the falsified sleep studies, even though he knew the reports were being altered. The federal indictment also alleges that he demanded to be paid for the use of his electronic signature on hundreds of prescriptions for devices to treat sleep apnea, which prescriptions he allegedly did not review, which were sent with the falsified sleep study reports to durable medical equipment providers that billed for sleep apnea equipment that patients often did not need.
If the defendants are convicted of the charges contained in the federal indictment, they face a statutory maximum penalty of 20 years in prison for each of the 31 mail fraud and wire fraud counts alleged in the indictment.
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