Hospital Executive Charged in $1.4B Rural Hospital Billing Scheme

July 1, 2020 by Christen Aldrich

Filed under For Employers

Last modified July 2, 2020

According to an article published by Kaiser Health News, a Miami entrepreneur who led a rural hospital empire was charged in an indictment unsealed Monday in what federal prosecutors called a $1.4 billion fraudulent lab-billing scheme.

In the indictment, prosecutors said Jorge A. Perez, 60, and nine others exploited federal regulations that allow some rural hospitals to charge substantially higher rates for laboratory testing than other providers. The indictment, filed in U.S. District Court in Jacksonville, Florida, alleges Perez and the other defendants sought out struggling rural hospitals and then contracted with outside labs, in far-off cities and states, to process blood and urine tests for people who never set foot in the hospitals. Insurers were billed using the higher rates allowed for the rural hospitals.

“This was allegedly a massive, multi-state scheme to use small, rural hospitals as a hub for millions of dollars in fraudulent billings of private insurers,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division.

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