Two men from Miami were sentenced last week for their roles in a multi-state billing scheme that targeted several rural hospitals, including one in Williston.
On Friday, December 15, 63-year-old Jorge Perez was sentenced to eight years and four months in prison. A second man, 60-year-old Ricardo Perez, received a prison sentence of six years and three months.
Last year, a federal jury in the Middle District of Florida convicted Jorge and Ricardo of conspiracy to commit health care fraud and wire fraud, five counts of health care fraud, and conspiracy to commit money laundering.
According to court documents and evidence presented at trial, Jorge was an owner and manager of hospitals, as well as the owner of a billing company, and Ricardo was the manager of a billing company. Both men conspired with each other and other individuals to unlawfully bill for laboratory testing services, primarily urine drug tests, that were deemed medically unnecessary.
This testing was then fraudulently billed through rural hospitals in Florida and Missouri instead of through the independent laboratories where a majority of the testing took place.
Jorge and Ricardo targeted and obtained control over rural hospitals that were “financially distressed,” and then used them for billing in order to take advantage of private insurance contracts that provided higher reimbursement rates for these hospitals than for out-of-network laboratories.
The claims submitted by Jorge and Ricardo made it appear that the hospitals themselves did the laboratory testing when, in most cases, it was done by testing labs controlled by others, including a co-conspirator.
Additionally, the evidence presented at trial further showed that much of the testing was for vulnerable addiction treatment patients and patients of pain clinics. Samples were often obtained through kickbacks paid to recruiters and substance abuse treatment facilities, and the tests billed by Jorge and Ricardo were often deemed “not medically necessary.”
Testing was performed at a rate that “far exceeded what would be needed for patient care,” including repeated screening and definitive testing that were performed before results from prior tests could be reviewed or used by the ordering providers.
The rural hospitals involved in this case were Regional General Hospital Williston, a 40-bed facility located in Williston that has permanently closed; Campbellton-Graceville Hospital, a 25-bed hospital located in Graceville, Florida that declared bankruptcy in 2017; and Putnam County Memorial Hospital, a 15-bed hospital located in Unionville, Missouri, that has struggled since Jorge and Ricardo misused the facility as a vehicle for laboratory billing.
The case was investigated by multiple agencies including the FBI Jacksonville Field Office.
Senior Litigation Counsel Jim Hayes and Trial Attorney Gary Winters of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tysen Duva for the Middle District of Florida prosecuted the case.