Physicians face possible prison, $900K in payments and penalties, for health care fraud allegations

Federal investigators describe separate cases involving criminal charges and civil claims.

A Texas doctor could face up to 20 years in prison if he pleads guilty to a charge related to Medicare fraud kickbacks.

Meanwhile, a New York doctor will pay $900,000 to resolve civil claims over upcoding bills for medical services, including smoking cessation counseling services that were improperly documented and alleged inappropriate opioid prescriptions.

The US Department of Justice (DOJ), the US Attorney for the Northern District of New York and New York Attorney General Letitia James issued press releases about the independent cases.

criminal charges

In the criminal case, Daniel R. Canchola, 49, of Flower Mound, Texas, was awarded $466,000 for electronically signing orders for durable medical devices (DME) and genetic cancer testing. Canchola knew the orders “were used to submit more than $54 million in false and fraudulent claims to Medicare,” according to a DOJ press release.

From August 2018 to April 2019, Canchola received approximately $30 for each doctor’s order he signed for unnecessary medical equipment and cancer tests. “The Medicare beneficiaries prescribed Canchola DME and cancer genetic testing were targeted by telemarketing campaigns and health fairs to undergo cancer genetic testing and receive DME regardless of medical necessity,” the DOJ said.

Canchola pleaded guilty to wire fraud conspiracy and is scheduled to be sentenced March 15, 2023, according to the DOJ.

The Office of the Inspector General (OIG) of the US Department of Health and Human Services (HHS) and the Texas Attorney General’s Medicaid Fraud Control Unit were investigating the case.

In October 2019, Canchola and the Texas Medical Board entered into an agreed order suspending Canchola’s medical approval pending further action by that board. The Texas Medical Board’s lawsuit found that the federal government charged Canchola in or about September 2019, according to the board’s online licensing filings.

civil proceedings

In New York, Ahmad M. Mehdi, MD, and Mehdi’s medical practice in Groton and Tully, New York, will pay $260,000 to reimburse the state’s Medicaid program. Mehdi will pay a fine of $308,750 to the state and $331,250 to the federal government to settle the claims.

From January 2012 to September 2018, “Dr. Mehdi engaged in upcoding of bills for medical services and billing for under-documented smoking cessation counseling services,” the attorney general’s office said. “He filed or filed these payment claims with the Medicaid program and various Medicaid Managed Care entities, and these state payers relied on these fraudulent payment claims.”

On October 27, 2022, it appeared that Mehdi’s medical license would remain registered until March 2023, according to online records from the New York State Education Department’s Office of the Professions.

fraud investigations

Earlier this year, federal investigators released an annual report that found for the 12 months ended September 30, 2021, the more than $5 billion Care Fraud and Abuse Control Program, which yielded more than $49.596 billion in healthcare fraud judgments and settlements over 25 years brought in.

Just weeks later, another medical fraud investigation worth more than $1.2 billion was announced, with criminal charges against 36 defendants across the country. HHS issued a scam alert warning doctors and other healthcare workers about leads that could point to false claims related to telemedicine.

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