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On December 1, 2016, the United States Department of Justice (DOJ) announced the unsealing of an indictment returned in November of this year against founders and investors of Forest Park Medical Center (FPMC) in Dallas. FPMC was a chain of five high-end, doctor-owned hospitals in North Texas. FPMC declared bankruptcy and its facilities were sold off earlier in 2016.
The indictment stemmed from a massive conspiracy involving $40 million dollars in bribes and kickbacks paid by FPMC in exchange for patient referrals over the four years between 2009 and 2013. The victims named in the indictment included the Federal Employee Compensation Act, TRICARE, Medicare, Medicaid, Federal Employees Health Benefits Program, UnitedHealthcare, Aetna, and Cigna.
In the indictment, it is alleged that FPMC paid bribes to the defendants in exchange for referrals of patients who primarily were insured with high-reimbursing, out-of-network private insurance benefits or benefits under the federally-funded programs listed above. By obtaining referrals of those patients, FPMC was able to essentially set its own fees and bill at much higher reimbursement rates than those allowed to network providers. At the same time, however, FPMC attempted to sell patients with lower-reimbursing insurance coverage (Medicare and Medicaid beneficiaries) to other facilities in exchange for cash. As a result of the bribes, kickbacks and billing practices, FPMC allegedly billed their patients’ insurance plans and programs over half-a-billion dollars and collected over $200 million dollars in paid claims.
Among the 21 people indicted were executives at the hospital, spine surgeons, bariatric surgeons, a pain management doctor, a West Texas chiropractor, a workers’ compensation pre-authorization specialist and a workers’ compensation lawyer. Some of the physicians indicted were treating doctors in the Texas worker’s compensation system.
In addition to the charges related to the payment and receipt of kickbacks, the five principal owners of FPMC were also indicted on money laundering charges. All of the defendants face federal prison time, fines, potential forfeiture of property and restitution if found guilty of the charges stemming from this indictment.