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Texas Doc, Hospital Owner Convicted in Fraud Scheme

Analysis  |  By John Commins  
   February 25, 2019

The fraudsters peddled weight-loss shots on Groupon, but subjected patients to unneeded tests, and billed for hospital services to get higher reimbursements.

A federal jury in Texas convicted an internist and hospital owner for their roles in a $3.2 million fraud scheme that billed commercial payers for bogus and inflated claims, the Department of Justice said.

Harcharan Narang, MD, 50, who owned and practiced at North Cypress Clinical Associates in Cypress, and Dayakar Moparty, 47, who managed and operated Red Oak Hospital in Houston, were each found guilty of one count of conspiracy to commit healthcare fraud, 17 counts of healthcare fraud and three counts of money laundering. 

Sentencing is set for June 20.

Evidence during the two-week trial showed that Narang and Moparty submitted false claims for unneeded and bogus medical tests, and billed those services at Red Oak Hospital to get a higher reimbursement.

Additionally, prosecutors said Narang and his co-conspirators falsified home health patient assessments to make the beneficiaries appear sicker than they were, to get higher reimbursements from Blue Cross Blue Shield, Cigna, Aetna and other payers.

Moparty also told his employees to falsely bill the medical services at Red Oak, even though the patients never received services there.

During the trial, patients testified that they bought a Groupon for weight loss shots with Narang, but that he gave them all a battery of medical tests that were not needed or provided.

As a result of the scheme, Red Oak received at least $3.2 million from payers, and Moparty covertly paid $3 million to shell companies owned by Narang.

A co-conspirator, Gurnaib Sidhu, MD, 67, of Houston, previously pleaded to conspiracy to commit healthcare fraud and is awaiting sentencing.    

Attempts by HealthLeaders to contact Red Oak Hospital and North Cypress Clinical Associates were not successful.  

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The two defendants were each found guilty of one count of conspiracy to commit healthcare fraud, 17 counts of healthcare fraud, and three counts of money laundering

The scheme used Groupon to advertise weight loss shots and subjected patients to a battery of unneeded or not provided medical tests.

As a result of the scheme, Red Oak Hospital received at least $3.2 million from payers, of which $3 million was secreted into shell companies.


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