ATLANTA — Former Georgia Insurance Commissioner John W. Oxendine pleaded guilty Friday to participating in a health care fraud conspiracy.
As presented in court, U.S. Attorney Ryan K. Buchanan said Oxendine conspired with Dr. Jeffrey Gallups to submit fraudulent insurance claims for medically unnecessary test procedures.
In exchange for directing the testing, Oxendine and Gallups received a 50% kickback of the net profits earned by Next Health, a Texas-based laboratory.
In connection with the health system, USDOJ said Mr. Oxendine gave a presentation at the Buckhead Ritz-Carlton, where he pressured doctors at the Gallups clinic to order unnecessary tests on the system. said.
Next Health subsequently filed claims for more than $2.5 million from health insurance companies for the tests, according to the U.S. Department of Justice.
“As a former statewide insurance commissioner, John Oxendine recognized the importance of honest dealings between physicians and insurance companies,” Buchanan said. “But for personal gain, he knowingly conspired with doctors to order hundreds of unnecessary tests that cost hundreds of thousands of dollars.” He will be held accountable for betraying him.”
In all, Next Health paid $260,000 for Oxendine and Gallups. Some patients affected by the program were charged up to $18,000, according to the Justice Department.
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As part of the scheme, the U.S. Department of Justice said Oxendine and Gallups arranged for payments to be made from Next Health to the former secretary's insurance consulting business, Oxendine Insurance Services, to conceal the kickback payments. Stated. Oxendine would then use some of that money to pay off Gallups' debts, including $150,000 in charitable contributions and $70,000 in legal fees.
When Gallups' clinic compliance officer raised concerns about the kickbacks, officials said Oxendine instructed Gallups to lie that the payments between them were loans.
Gallups was told by Oxendine to lie to federal officials during the Next Health investigation.
“This system of billing for unnecessary services has no place in our nation's health care system,” said FBI Atlanta Special Agent in Charge Keri Farley. “This not only increased medical costs for all of the beneficiaries, but also undermined patient trust. John Oxendine not only profited from this scheme, he went a step further and used it to cover up the fraud. directed another person to lie to federal officials.”
In an interview with an Atlanta news outlet, the U.S. Department of Justice said Oxendine was asked about Next Health in connection with a private lawsuit, and the former health secretary said he had “not cooperated with laboratories or taken money from companies.” “Falsely denying receipt of the documents,” he said.
Gallups pleaded guilty to health care fraud in connection with the scheme, according to the USDOJ. Oxendine has pleaded guilty and is scheduled to be sentenced on July 12th.
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