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Analysis

Texas Hospital Ex-CEO Pleads Guilty in Fraud Scheme

By John Commins  
   March 13, 2019

The former leader of Palo Pinto General Hospital and his coconspirators used the hospital's national provider ID to submit fraudulent claims for lab work.

The former CEO of a Texas community hospital has pleaded guilty to defrauding three health insurers in a pass-through billing scheme involving laboratory services, the Department of Justice said.

According to his plea papers, Palo Pinto General Hospital ex-CEO Harris Brooks and his co-conspirators, used the Mineral Wells, Texas hospital's in-network contracts with BlueCross BlueShield of Texas, CIGNA Texas, and United Healthcare to swindle the payers out of more than $9 million.

Using PPGH's national provider identification number, Brooks and his co-conspirators submitted claims to the insurance companies for allergy and genetic testing purportedly performed at PPGH.

In reality however, PPGH did not have the equipment on-site to perform the tests for which it submitted claims, and the patients for whom claims were submitted were receiving treatment at various spas and clinics throughout Texas and elsewhere, not PPGH, the plea agreement states.

The patients did not know about the pass-through charges using PPGH's insurance contracts. 

Between September 2017 and June 2018, Brooks and his co-conspirators submitted claims totaling more than $55 million, the vast majority of which were fraudulent.  As a result of these claims, the insurance companies paid PPGH more than $9 million.  

Harris admitted that the purpose of the scheme was to receive higher reimbursements from the insurers. 

According to his plea agreement, Brooks faces up to five years in prison and will be required to pay restitution to those he defrauded.   

John Commins is a senior editor at HealthLeaders.


KEY TAKEAWAYS

Over nine months, Brooks submitted claims totaling more than $55 million, the vast majority of which were fraudulent.

As a result of these claims, insurers paid PPGH more than $9 million.


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