Ten individuals, including hospital managers, were charged in an indictment on June 29 for their participation in an elaborate billing scheme using rural hospitals in several states as billing shells to submit fraudulent claims for laboratory testing.
According to the Department of Justice, the indictment alleges that from approximately November 2015 through February 2018, the conspirators billed private insurance companies approximately $1.4 billion for laboratory testing claims as part of this scheme, and were paid approximately $400 million.
One of the 10 charged is 60-year-old Jorge Perez, of Miami-Dade County, Florida, CEO of EmpowerHMS, which managed I-70 Community Hospital in Sweet Springs.
The indictment alleges that the conspirators would take over small, rural hospitals, often in financial trouble, using management companies they owned and operated. The conspirators would then bill private insurance companies through those rural hospitals for millions of dollars of expensive urinalysis drug tests and blood tests conducted mostly at outside laboratories they often controlled or were affiliated with, using billing companies that they also controlled. While outside laboratories did most of these laboratory tests, the conspirators allegedly billed private insurance companies as if these laboratory tests were done at the rural hospitals- four of which were named in this indictment, including Putnam County Memorial Hospital in Unionville, Mo.- but not I-70 Community Hospital.
The indictment alleges these rural hospitals had negotiated contractual rates with private insurers that provided for higher reimbursement than if the tests were billed through an outside laboratory. Accordingly, the scheme used the hospitals as a shell to fraudulently bill for such tests. Further, the indictment alleges that the lab tests were often not even medically necessary.
The conspirators allegedly would obtain urine specimens and other samples for testing through kickbacks paid to recruiters and healthcare providers, often sober homes and substance-abuse treatment centers. The indictment also alleges that the conspirators engaged in sophisticated money laundering to promote the scheme and to distribute the fraudulent proceeds.
I-70 Community Hospital closed its doors because of financial woes on February 15, 2019. It was a voluntary closure voted on by the board. At that time, the closure was supposed to last no longer than 90 days. The hospital has not reopened to date.
The hospital was supposed to be auctioned off in late 2019. However, no other information has been made available on the possible buyer.
Perez has been charged with one count of conspiracy to commit healthcare fraud and wire fraud; five counts of substantive healthcare fraud; one count of conspiracy to commit money laundering; and five counts of substantive money laundering.
Perez appeared Monday, June 29, before U.S. Magistrate Judge Joel B. Toomey of the Middle District of Florida. No other information is available at this time.