Earlier this year, Chad E. Meacham, United States Attorney for the Northern District of Texas, announced a $300 million healthcare fraud indictment involving ten people – including two medical doctors.
The ten defendants are accused of conspiracy to commit healthcare fraud, conspiracy to pay and receive healthcare kickbacks, offering or paying illegal kickbacks, and soliciting or receiving illegal kickbacks in a 26-count indictment.
According to the indictment, the founders of several lab companies allegedly paid kickbacks to induce medical professionals to order medically unnecessary lab tests, which they then billed to Medicare and other federal healthcare programs. The medical professionals allegedly accepted the bribes and ordered millions of dollars’ worth of tests.
The labs, through marketers, allegedly paid doctors hundreds of thousands of dollars for “advisory services” (which were never performed) in return for lab test referrals. They also allegedly paid portions of the doctors’ staff’s salaries and a portion of their office leases, contingent on the number of lab tests they referred each month. In some instances, lab marketers made direct payments to the provider’s spouse. The payments were contingent on referrals from the providers, as the labs once threatened one of the providers that payments would cease if he didn’t refer more tests, which resulted in an immediate increase in his lab referrals, averaging approximately 20 to 30 referrals per day.
The labs allegedly disguised the kickbacks paid to providers as legitimate business transactions, such as medical advisor agreement payments, salary offsets, lease payments, and marketing commissions.
Knowing they could disguise additional kickbacks using a provider-ownership model, the founder of Spectrum Diagnostic Laboratory and Unified Laboratory Services, Jeffrey Madison, convinced the co-founders of Reliable Labs, LLC, Biby Kurian and Abraham Phillips, to convert Reliable into a physician-owned lab. Under the structure, Reliable would offer physicians ownership opportunities only if they referred an adequate number of lab tests. In some cases, Reliable made advance payments to physicians to appease the physician and ensure he would not send samples to other labs.
As a result of the kickback arrangements, laboratories controlled by the defendants were able to submit more than $300 million in billing to federal government healthcare programs. Between 2015 and 2018, Dr. Jose Roel Maldonado received more than $400,000 in kickbacks for ordering more than $4 million worth of lab tests and Dr. Eduardo Carlos Canova received more than $300,000 in kickbacks for ordering more than $12 million worth of lab tests.
The defendants and their respective roles in the alleged conspiracy are:
- Jeffrey Paul Madison, 56, founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory
- Mark Christopher Boggess, 49, chief operating officer for Spectrum and Unified
- Biby Ancy Kurian, 49, co-founder of Reliable Labs, LLC
- Abraham Phillips, 50, co-founder of Reliable Labs, LLC
- Dr. Jose Roel Maldonado, 48, family medicine doctor based in Laredo
- Dr. Eduardo Carlos Canova, 44, internal medicine specialist based in Laredo
- Keith Allen Wichinski, 50, board-certified nurse practitioner based in San Antonio
- David Michael Lizcano, 56, owner of DCLH, a marketing firm engaged by Unified, Spectrum, and Reliable
- Laura Ortiz, 58, sister of David Lizcano and employee at his marketing firm
- Juan David Rojas, 34, owner of Rojas & Associates, another marketing firm engaged by Unified, Spectrum, and Reliable
An indictment is just an allegation of criminal conduct and no parties have been found guilty as of the writing of this article. Defendants are presumed innocent until proven guilty in a court of law. If found guilty and convicted, the defendants may face 55 years or more in federal prison.