Opinion ID: 2971210
Heading Depth: 2
Heading Rank: 1

Heading: Defendant’s Medical Practice

Text: In 1998, defendant helped recruit seven foreign physicians Defendant is a physician who owned and operated two for MAHC. Defendant recruited them under a program that clinics in 1997, the McKee Medical Center in McKee, allows foreign doctors to stay in the United States if they Kentucky, and the Richmond Medical Center in Richmond, secure employment in medically under-served areas. Under Kentucky. In 1997, defendant sold the clinics to Mountain this program, MAHC had to meet several requirements After Hours Clinic Corporation (“MAHC”). As part of the including submitting a Labor Condition Application (“LCA”) sale, defendant became an employee of MAHC and was to the DOL, and a Petition for Nonimmigrant Worker (an “I- issued one-sixth of the shares of stock in MAHC. By 1998, 129 form”) to the INS, setting forth information such as the MAHC owned four other clinics in Hazard, Nicholson, physician’s wage, for each physician hired. MAHC was London, and Somerset, Kentucky. required to pay each foreign doctor no less than the prevailing wage for the area – the average wage paid to physicians in the During 1997, when defendant owned the McKee and area for comparable work. Richmond clinics, the billing for both clinics was done at the McKee clinic. Tammy Spurlock, defendant’s office manager, The McKee clinic was designated a “rural health clinic” by testified that she, Beverly Lainhart, and Renee Hudson did Medicare. As a rural health clinic, the McKee clinic was billing work. Between January and December of 1998, all reimbursed a flat rate for each Medicare/Medicaid patient it billing for the six MAHC clinics was performed by an outside saw, regardless of the treatment rendered. The McKee clinic billing service, Office Management Services (“OMS”). In was required to submit to Medicare a yearly “cost report” – a April of 1999, OMS stopped providing billing services for summation of the costs incurred by the clinic in treating MAHC, and the McKee clinic began doing billing for all of patients. Once a clinic reached the maximum reimbursement the clinics. rate set by Medicare/Medicaid, additional expenses on the cost report were not reimbursed during that year. However, To bill its services, a medical clinic issues an invoice to the reported costs were used to calculate future patient’s insurer that contains a current procedure terminology Medicare/Medicaid reimbursement rates per patient. (Shreve, (“CPT”) code. The CPT code indicates to the insurer the Tr. 100.) level of service rendered by the clinic and the amount of reimbursement owed to the clinic. When a medical In May 1998, a cost report was prepared for the McKee practitioner sees a patient, the practitioner records a CPT code clinic for the period of October 1, 1996 through on an “encounter form” to record the services performed. The September 30, 1997, which included $50,393.53 of CPT codes for established patients range from the least defendant’s personal expenses. Defendant alleges that when expensive, 99211, to the most expensive, 99215. The CPT defendant operated as a sole proprietor of the Richmond and codes for new patients range from the least expensive, 99201, McKee clinics, prior to their purchase by MAHC, defendant to the most expensive, 99205. (Cost. Tr. 53.) One type of “often used business checks to pay personal expenses and “up-coding” scheme occurs where the CPT numbers are would, at the end of the year, separate the personal and changed on the encounter forms and/or billing sheets sent to business expenses in order to prepare the corporation’s tax the insurance companies so that it appears as if the clinic returns.” (Def. Br. 113.) Defendant contends that his No. 02-6013 United States v. Raithatha 5 6 United States v. Raithatha No. 02-6013 personal expenses were inadvertently included on the cost expenses unrelated to patient care. Included in those report. expenses was money which was actually spent to furnish and complete defendant’s home. (Indictment, 6-7.)