On Monday, two individuals, Jorge and Ricardo Perez, were convicted for a conspiracy to unlawfully bill patients for “medically unnecessary” tests for a total of $1.4 billion dollars in the Middle District of Florida. Additionally, the defendants committed healthcare fraud and committed a conspiracy to launder this money to themselves.
According to the attorneys general, the defendants targeted “financially distressed” rural hospitals through management agreements and purchases through “private insurance contracts that provided for higher reimbursement rates for laboratory testing.” They offered to transform these hospitals into laboratory testing sites but instead “billed for fraudulent laboratory testing worth hundreds of millions of dollars in a sophisticated and years-long ‘pass-though’ billing scheme.” However, they instead did the tests at facilities that they privately owned and then claimed that these hospitals ran the tests.
The prosecution found that a main method of revenue for the two was charging vulnerable drug addiction patients with urine tests and other “medically unnecessary” procedures. Once insurance companies started to question the charges, the defendants moved to different hospitals, leaving these hospitals to suffer under the weight of insurance claims. As of now, three out of the four hospitals used by the defendants have been forced to close due to bankruptcy.
The defendants were charged with conspiracy to commit health care fraud and wire fraud, five counts of health care fraud, and conspiracy to commit money laundering of proceeds greater than $10,000, where they face “a maximum penalty of 20 years for each of the health care fraud and wire fraud conspiracy and money laundering conspiracy counts, and 10 years for each substantive health care fraud count.”