Southeast Texas businessman arrested in fraud scheme

UPDATE: William Hickman’s attorney responds.

Two Southeast Texas businessmen and a Silsbee physician have been named in a Justice Department complaint against two laboratory CEOs, a hospital CEO and other individuals and entities, alleging violations of the False Claims Act based on patient referrals in violation of the Anti-Kickback Law. Statute and Stark Law.

Stephen Kash, of Beaumont, and William Todd Hickman, of Lumberton, the government alleges in a 154-page civil penalty lawsuit against them and others, were participants in a years-long conspiracy to funnel unnecessary medical procedures through certified rural hospitals. they are authorized to bill health insurance providers like Medicaid and Medicare at premium rates. By contract, all other hospitals are only paid on a designated fee scale determined by insurance providers.

As described in the government complaint, “In each of the… bribery schemes, the bribes were paid to induce the recipients (health professionals) to routinely request a large number of laboratory tests for screening purposes, regardless of whether any or all of the tests were reasonable and necessary for the patient.”

“The bribes had their intended effect,” federal attorneys further allege, as the conspirators allegedly took millions of taxpayer dollars in the process.

According to the United States lawsuit, laboratory executives and employees of True Health Diagnostics LLC (THD) and Boston Heart Diagnostics Corporation (BHD) allegedly conspired with small Texas hospitals, including Rockdale Hospital dba Little River Healthcare, to pay physicians to induce referrals to hospitals for laboratory tests, which were then carried out by diagnostic groups. The complaint alleges that the hospitals paid a portion of their lab profits to the recruiters, who in turn returned those funds to the referring doctors. Recruiters allegedly created companies known as management service organizations to make payments to referring physicians that were disguised as ROIs but were actually based on and offered in exchange for physician referrals.

Two recruiters, Hickman and Kash from southeast Texas, were allegedly instrumental in much of the conspiracy, serving as go-betweens to facilitate the scheme.

Hickman furthered the conspiracy by “among other things, creating, owning, and operating APMs, APCs, and Ascend MSOs; meet with at least one (healthcare professional) about Ascend MSO kickbacks; deposit purported investment checks (healthcare professionals) provided to Ascend MSO; authorize and sign purported Ascend MSO distribution checks to (healthcare professionals); (and) authorize and sign checks and/or bank transfers for himself and (others),” the government complaint alleges.

Hickman was also criminally charged for his involvement in the scheme, arrested and released on $50,000 unsecured bail on felony charges of conspiracy to commit unlawful pay. Jury selection for him and eight others is scheduled for July 18 in Tyler.

Kash is listed in the civil suit as a close co-conspirator in Hickman’s role in the scheme, “among other things, by attending in-person meetings with potential referral sources (healthcare professionals); recruit (healthcare professionals) by offering them bribes from Quick MSO and/or Ascend MSO; provide information and/or documentation to (health professionals) about bribes; receive documentation from (health professionals); provide and/or coordinate the delivery of checks to (health professionals); direct staff to provide supplies and shipping materials to (healthcare professionals); meeting with staff about lab referrals; and receive money, directly or indirectly, as compensation for hiring (health professionals) to refer.”

An example offered in the federal filing alleges that Hickman-led BenefitPro recruited Dr. Doyce Cartrett, also known as Physician H, of Silsbee, to refer lab tests as part of the scheme.

“To induce referrals from Doctor H,” the complaint alleges, “Kash offered to pay bribes to Doctor H.

“Physician H agreed to participate in the kickback scheme, provided Kash with a purported $6,000 investment check, and began referring laboratory tests for federal health care recipients on or about September 27, 2016.

“Hickman did not deposit Doctor H’s check until approximately November 28, 2016. By that date, Doctor H had made dozens of referrals for lab tests, and Hickman had signed and Kash had provided Doctor H with a check dated on November 23. , 2016, for $15,000, two and a half times the amount of the alleged investment of doctor H”.

During the period from September 2016 to December 2017, Doctor H was paid more than $234,000 in bribes, the complaint further details, “a return of more than 3,800% based on Doctor H’s alleged investment of $6,000.”

In addition to paying the health professionals who referred him, Hickman’s BenefitPro allegedly also paid a significant portion of the money to him and his close connections.

“Under Hickman’s direction, BenefitPro transferred more than $1.5 million to APM, which paid Hickman’s company, Hickman Tax and Retirement Advisors, $356,699.92 in 2017.

“To hide his role in the kickback scheme, Kash ordered BenefitPro to pay him through Tigerlily. From December 2016 to December 2017, BenefitPro paid Kash, through Tigerlily, a total of $671,039.66.”

Hickman’s other beneficiaries, Christopher Gonzalez and Laura Howard, received $702,784.61. Howard allegedly recovered his share of the reward in bags of cash valued at $10,000, except for Christmas when Howard received $70,000 in cash.

“Paying bribes to doctors distorts the medical decision-making process, corrupts our health care system and drives up the cost of taxpayer-funded health care,” said local US Attorney Brit Featherston. “Laboratories, merchants and doctors cannot immunize their conduct by trying to disguise bribes as some kind of investment deal. Our office is committed to investigating the disguise and ending any arrangement whose purpose is to improperly influence medical decision-making through the payment of bribes.”

The United States brought its complaint in a lawsuit originally filed under the False Claims Act’s whistleblower provisions, where a private party can bring an action on behalf of the United States and receive a portion of the recovery. The law allows the United States to intervene in such lawsuits and aggregate claims and defendants, as it has done here. If a defendant is found liable for violating the law, the United States can recover three times the amount of its losses plus any applicable penalties.

In direct response to this article, Hickman’s legal representative, S. Cass Weiland, a senior partner at Squire Patton Bogg in Dallas, offered a comment on behalf of his client:

“I would ask you to add to your story that the allegations are just that: allegations.

“Messrs. Hickman have a long history of fully complying with the law and, in this case, had extensive legal advice on the propriety of their activities. He was shocked by the government’s claims and most of the people in his story were and they are still unknown to him.”

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