The fraud was perpetuated by Wendell Alford, a former administrator of the hospital, Casey Hughes, who provided various administrative and diagnostic services to the hospital, and Lake Charles, La.-based Insurance World Agent Russell Ham, according to the Louisiana Legislative Audit of Madison Parish.
The audit revealed Mr. Hughes billed the hospital based on contracted rates for "administrative and management" service fees associated with nuclear medicine, but did not provide the services to the hospital.
Additionally, Mr. Alford hired individuals or used hospital staff to perform the services for which Mr. Hughes was paid. As a result, Mr. Alford continually approved invoices from Mr. Hughes for services that were being performed by hospital employees. Mr. Alford received at least $566,874 of the proceeds as a result of approving these fraudulent invoices, according to the audit report.
From Jan. 2007 to April 2012, Mr. Alford approved inflated bills for insurance services from Mr. Ham totaling $2.98 million. Mr. Ham stated he intentionally inflated his billings to the hospital and split the proceeds, between $817,000 and $1.49 million, with Mr. Alford.
Madison Parish could be expected to pay back the overpayment in June, and it is still unclear if the three men will be able to pay any of the restitution fines imposed on them to pay back the $2.5 million, according to a Monroe News Star report.
If the hospital is forced to make the payment the hospital will go negative and "stay negative for the rest of the year," said CEO of Madison Parish Scott Barrilleaux, in the report. "If we have to cut a check for $2.5 million, it would shutter us."
If the hospital does not make the repayment, CMS could stop Medicare and Medicaid reimbursement to the facility until it is paid in full.
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