A former Georgia insurance commissioner was sentenced to 3.5 years in prison for conspiracy to commit healthcare fraud, the Justice Department said July 12.
John Oxendine pleaded guilty in March to participating in a scheme that billed private insurers for over $2.5 million in false claims.
Mr. Oxendine was Georgia's insurance commissioner from 1995 to 2011. The scheme took place after he left office.
According to the Justice Department, Mr. Oxendine conspired with the owner of a chain of ENT practices, to submit unnecessary claims to NextHealth, a Texas-based lab. In 2022, Jeffery Gallups, MD, the owner of the clinics, was sentenced to three years in prison for his role in the scheme.
As part of the scheme, Mr. Oxendine gave a presentation to physicians at Dr. Gallups' practice, urging them to bill medically unnecessary tests to NextLabs, according to the Justice Department. NextHealth paid a 50% kickback from profits it made from the false claims to Mr. Oxendine and Dr. Gallups.
NextHealth charged private insurers over $2.5 million for the tests ordered from Dr. Gallups' practice and were paid more than $750,000 in reimbursements. Mr. Oxendine and Dr. Gallups received $260,000 in kickbacks, according to the Justice Department. Mr. Oxendine received payment through his insurance consulting company, Oxendine Insurance Services, to conceal the scheme.
Mr. Oxendine used a portion of his profits to pay a $150,000 charitable contribution, and $70,000 in legal fees for Dr. Gallups.
In addition to the prison sentence, Mr. Oxendine was ordered to pay over $760,000 in restitution and a $25,000 fine, according to the Justice Department.