Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

October 2: Week That Was in Healthcare Fraud and Malpractice

By Jacqueline DiChiara

- Here is a general roundup of the past week’s developments in healthcare fraud and malpractice, as reported by the Department of Justice and the Office of Inspector General. The crimes reported below result in multiple millions of dollars in healthcare fraud and the possibility of extensive prison time.

fraud in healthcare false claims act

Texas physician to pay $2M, faces possible 10 year sentence

Robert Hadley Gross, MD, a licensed psychiatrist based out of San Angelo, Texas, pleaded guilty last week to one count of healthcare fraud in association with a scheme which included charging for services when patients had since passed away or had been discharged.

Gross, who has been in federal custody since 2014 for similar charges, could spend up to a decade in jail and pay a possible $250,000 fine. He will already pay nearly $2 million to represent the extension of his overpayments, says the case’s plea agreement.

From 2009 to 2014, Gross filed claims against Medicare, Medicaid, and other health insurance carriers for payment for non-rendered services under erroneous CPT codes, says the Department of Justice. Claims filed against Medicare and Medicaid were associated with errors including incorrect dates.

$2.6M in allegations with American Access Care recovered

This week, the Department of Justice announced the recovery of $2.6 million involving False Claims Act violations on behalf of American Access Care Holdings (AAC), formerly operated by AAC in Providence, Rhode Island. Allegations include knowingly submitting medically unnecessary Medicare claims and billing beyond what is permitted. Under the False Claims Act, federal funds are recovered when they are paid because of a knowingly false or fraudulent claim or series of such that subsequently incurs damages, confirms the Department of Justice. 

Says United States Attorney, Peter F. Neronha, “Doctors and companies that choose to collect federal healthcare dollars must do so with a clear understanding that those dollars come with responsibilities – first and foremost, that all care is billed because it’s necessary for the patient, not the bottom line.” This settlement, he adds, is an indication vigorous efforts to maintain compliance must continue so taxpayer dollars are spent appropriately.

Adds Special Agent in Charge, Philip Coyne, of the United States Department of Health and Human Services Office of Inspector General, “Health care providers will not be permitted to provide unnecessary medical procedures – in this case, invasive procedures – on patients and then pocket the improper payments they receive as a result." 

Florida physician intentionally misdiagnoses 500 patients

David M. Pon, MD, of Florida, was found guilty via a federal jury last Tuesday on 20 counts of healthcare fraud in association with an elaborate Medicare fraud scheme. Pon, indicted in April of last year, faces a possible decade in federal prison.

Pon both “intentionally” and “fraudulently” erroneously diagnosed over 500 Medicare beneficiaries, as the Department of Justice confirms. “Pon injected his victims with various dyes that posed potential serious health risks, including cardiac arrest,” says the Department of Justice. “Several of the misdiagnosed patients testified and explained the significant emotional impact the false diagnosis had on their lives, including the fear of going blind as a result of the disease,” the organization adds.

Says Special Agent in Charge, Shimon Richmond, misdiagnosing patients to provide both invasive and dangerous services and subsequently fraud Medicare is “unconscionable.”

Adds United States Attorney A. Lee Bentley, III, “The fraud committed by Dr. Pon, a well-trained ophthalmologist, was particularly egregious. He abused his position of trust and falsely diagnosed hundreds of Medicare patients with wet macular degeneration, a progressive eye disease that can lead to blindness. He instilled fear in his victims, performed unnecessary and sometimes dangerous medical procedures on their eyes, and asked the taxpayers of this country to pick up the tab.”


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