Opinion ID: 37901
Heading Depth: 3
Heading Rank: 2

Heading: Health Care Clinic and Gym Scheme

Text: The government asserted at trial that, beginning in 1993, Kirkham, along with several other individuals, conducted a continuing scheme to defraud health care benefit programs through their operation of health care clinics associated with gyms and 4 health clubs; Murphy joined Kirkham in operating the scheme in 1997. Kirkham and Mark Darner, a chiropractor, operated the scheme along with Murphy and other medical doctors, including Lostetter and Victor McCall. Darner pleaded guilty to conspiracy to commit mail fraud and testified about the health care fraud scheme at Kirkham and Murphy’s trial. Darner testified that he and Kirkham set up health care clinics inside a number of health clubs of which they were majority owners, and that they used the club sites to solicit and direct new patients to the clinics. Murphy’s, Lostetter’s, and McCall’s names were often used in billing insurers, said Darner, explaining that insurers are more likely to reimburse and to pay a higher rate for invoices submitted by doctors than those from chiropractors. According to Darner, Kirkham was the CEO and principal operator of the health clubs. He directed Darner regarding implementation of the scheme. Defendants implemented a standing procedure that required each new fitness club member to be examined in the clinic. While Murphy was associated with the clinics in 1997 and 1998, they employed a written treatment protocol authored by Kirkham, Murphy, and Darner. This protocol specified listed treatments to be given to each new “patient” or gym member at the five or six clinics being operated at the time, with explicit instructions not to modify treatment unless it was contraindicated. Clients were assigned treatment classifications based on their insurance 5 coverage. For the first visit of a member/client who had insurance, the protocol required a new patient exam, range of motion analysis, scanning EMG, thermography, and radiographs regardless whether tests and these treatments were indicated as required by the patient. The second automatic visit protocol called for more extensive tests and treatment, including billing for a number of other diagnostic tests. Testifying at Kirkham and Murphy’s trial were (1) Darner, (2) Victor McCall, another physician who participated in the scheme, and (3) Charles Stafford, a staff chiropractor, as well as several clinic “patients,” a medical transcriber, and an expert witness. The witnesses who had participated in the scheme with defendants described the nature of the scheme in detail, including the process used for submitting the fraudulent claims. The clinic’s clients testified that, after joining the health club for fitness reasons, they were told to go to the clinic for unwanted and unnecessary medical exams. Several clients identified false listings of symptoms and diagnoses in their files and confirmed that claims sent to their insurance companies were false. The government also presented an expert witness, Charles Crane, M.D., who testified that defendants’ billing and testing procedures were inappropriate and fraudulent. Eeletha Williams, a medical transcriber who worked for Murphy from 1995 to 1999 testified that most of Murphy’s patient reports contained a note stating that the billing had been dictated but not read by Murphy, 6 even though Murphy had not dictated, reviewed, or provided any information for the reports. She also stated that Murphy told her on several occasions that the reports were too short and asked her to generate more lengthy patient reports containing false information.