Part of the Problem

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Mid adult female patient being assisted by physical therapist while doctor applauding

After a recent health care fraud crackdown, two Austin, Texas, psychologists and a patient recruiter from Cedar Park, Texas, were charged with health care fraud. The trio was part of a larger scheme including 115 doctors, nurses and other medical practitioners who allegedly bilked the federal government out of $1.3 billion. (Apparently, this crackdown was the largest health care fraud enforcement action in the history of the Department of Justice.)

Today’s trio was a subset of roughly 50 doctors and other health care providers in the overall scheme who billed Medicare, Medicaid and a federal military program for drugs that were never purchased and treatments that were not necessary or performed. (The providers paid cash kickbacks for beneficiary information that was used to falsely bill the federal health care programs.)

 The doctor and son psychologists and the President of their practice’s Board of Directors colluded to defraud the Texas Medicaid program and the Texas Vocational Rehabilitation Services program (VR). They submitted more than $300,000 in fraudulent claims to multiple government health care programs over more than four-and-a-half years.

Here’s how the scheme worked. The Board of Directors president was also the director of an emergency shelter that provided services for children – ages 5 to 17 – who had been removed from their homes by the Texas Department of Family and Protective Services. He used his position at the shelter, which is located about 80 miles from Austin, to refer children to the psychologists’ practice, which was called Psychological Arts (PARTS). (See where this is going?) The psychological practice used the personal information of the referrals to bill Medicaid and the VR program for services that were not necessary. (He referred children for various psychological services, including testing, in exchange for a 10 percent kickback. Eventually, he admitted to receiving more than $15,000 in kickbacks.)

According to court documents, the psychologists often had unlicensed students or interns (who were not supervised, I might add) to perform psychiatric diagnostic evaluations on the referred youth. (The same unqualified staff prepared reports on the child’s behavior and recommended a course of future treatment, which may or may not have been needed.) Further research shows that in cases where a licensed psychological associate provided services, PARTS would bill Medicaid at a higher rate, as if the father-son team had done the work.

The 68-year-old patient recruiter, who served as the president of PARTS’ Board of Directors for nearly two years, pleaded guilty to health care fraud, including one count of conspiracy to violate the federal anti-kickback law and one count of soliciting and receiving kickbacks. When sentenced, he faces up to five years in federal prison for each count.

The father-son duo has been indicted on federal charges including conspiracy to violate the federal anti-kickback law, five counts of paying illegal kickbacks, conspiracy to commit health care fraud, seven counts of health care fraud and aiding and abetting health care fraud and six counts of aggravated identity theft.

The fraudsters, who ironically dealt with emotional issues in their respective professions, were the abusers. Instead of being part of the solution for many vulnerable children, this fraud trio was part of their problem. It’s ironic that these men, who were supposedly professional, abused their patients and caused more emotional pain. (They also caused a great deal of financial pain for the federal government.) As you know, the Department of Justice does not care for those who abuse government programs or citizens. Here’s hoping that these three will all receive sentences that fit their heinous crime.

Today’s “Fraud of the Day” is based on a Department of Justice press release from the Western District of Texas entitled, “Austin Area Patient Recruiter Pleads Guilty to Receiving Kickbacks in Health Care Fraud Scheme,” released on October 11, 2017.

In Austin this afternoon, 68-year-old patient recruiter Glen Elwood McKenzie, Jr., of Cedar Park, TX, pleaded guilty to federal charges in connection with a Health Care Fraud scheme announced United States Attorney Richard L. Durbin, Jr., FBI Special Agent in Charge Christopher Combs, San Antonio Division, and Texas Attorney General Ken Paxton.

Appearing before United States Magistrate Judge Mark Lane, McKenzie pleaded guilty to one count of conspiracy to violate the federal anti-kickback law and one count of soliciting and receiving kickbacks. Each count calls for up to five years in federal prison. McKenzie remains on bond pending sentencing, which has yet to be scheduled.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.