WA Oncologist Indicted in $1.7M Medicare Fraud Scheme

A Lakewood, WA oncologist and his wife face 20 counts of healthcare fraud and related charges for an alleged scheme to overbill Medicare and other government and private health plans by about $1.7 million for larger amounts of medicine than were delivered to patients, the Department of Justice said.

Alfred Hongleung Chan, 63, and Judy Yuan Chan, 62, face up to 20 years in prison if convicted of the charges, which include obstruction of justice and money laundering. The indictments were handed up earlier this year by a federal grand jury, and unsealed this week in U.S. District Court in Tacoma. Arraignment is scheduled for July 29.  

The charges stem from a whistleblower False Claims Act suit by a former employee at the Chans' Lakewood clinic. The indictment and the civil suit allege that, beginning in 2006, Alfred Chan would make patient treatment notes on individual slips of paper which were given to his nurse. The notes specified the amount of drugs to be provided to a specific patient. After the nurse had provided the drugs to patients, the slips of paper were returned to Chan who shredded them. The doctor then made entries into a "Superbill" form, ostensibly recording the amount of medications the patients had received, DOJ said in a media release.

Evidence in the case, however, allegedly indicates that Alfred Chan recorded more medication administered than actually received by the patient, and claimed more time spent administering the medication than actually occurred.

Judy Chan then allegedly prepared the bills for Medicare and other government and private healthcare programs, using the inflated amounts, substantially increasing the amount of money owed to the Chans' clinic for medication.

The government alleges the scheme illegally boosted the clinic income by $1.7 million. Alfred Chan made false entries on patients' medical records so that they matched the billings. The records indicated that patients had received larger doses of various drugs than they had actually received, DOJ said.

The false statement, obstruction, and money laundering charges relate to steps allegedly taken by the Chans to hide their assets once they became aware of the government investigation. On a financial disclosure form required by the government, the couple didn't declare bank and brokerage accounts and properties owned by them. They allegedly transferred assets to shield them from the reach of law enforcement, DOJ said.