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CFO of Texas hospitals indicted for health care fraud

A chain of failed Texas hospitals is at the center of a health care fraud case. Accusations of identity theft in connection with the misuse of stimulus funds has two former top administrators facing serious charges. Additionally, at least one of the two has been indicted on charges of health care fraud.

What may have previously been seen as a rags-to-riches story might now just seem like a bad decision. The CFO over the Texas hospitals in question originally started out his career as a maintenance man before he worked his way up. While working with the physician who owned the hospitals, the two conspired to receive stimulus funds that they did not even qualify for. The stimulus funds were intended to help hospitals convert their paper records to more updated electronic records.

All in all, the six hospitals in the chain took in almost $18 million worth of funds that were intended to update their record-keeping system. The CFO and owner used the social security number of an employee who was not willing to lie about the hospitals' eligibility to falsely claim that they did, indeed, qualify. Once they received the funds, they were not accurately put to their intended use. While there was an attempt to convert the old paper system over to electronic, investigations revealed that third parties were instructed to manually enter data for patients who had been discharged months beforehand.

The CFO and owner of the hospitals are both facing charges related to the misuse of the stimulus funds and health care fraud. In particular, the CFO has been indicted for aggravated identity theft as well as making a statement that was false. The CFO's previous position as a maintenance man may be pointed out and questioned during court proceedings, and the sentence for his charges could land him a seven-year prison sentence and fines in the amount of half a million dollars. In order to avoid the maximum sentence, his best bet may be to brief himself on all state and federal laws that are applicable to his case in order to build an extensive defense team that will work with his best interests in mind.

Source: dallasnews.com, Texas hospitals chief faces fraud charges over use of stimulus grants, No author, Feb. 6, 2014

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