Two doctors and two of their employees have been indicted on charges involving an alleged $17 million in workers’ comp insurance overbilling. How does something like this happen?
Dr. Sim Hoffman of Newport Beach, CA, is a radiologist and owner of an imaging center and a sleep center. He’s charged with 883 felony counts of insurance fraud and one felony count of aiding and abetting the unauthorized practice of medicine. If convicted, he faces 2 to 892 years in prison.
Dr. Thomas Heric, a neurologist who worked for Hoffman, is charged with 296 counts of insurance fraud and one felony count of aiding and abetting the unauthorized practice of medicine. He faces between 2 and 315 years in prison.
Two other workers involved in billing and collections who worked for Hoffman also face long prison sentences.
How does one doctor mastermind a huge fraud like this, according to investigators?
Law makes it possible
The Orange County District Attorney’s office says part of the problem lies in the state’s workers’ compensation law.
In California, doctors and insurance companies aren’t required by law to communicate with the workers’ comp recipient (the injured worker) about what medical procedures are being claimed for billing. There’s no system in place to verify which services were provided during a medical appointment.
So it’s possible to subject injured workers to unnecessary medical diagnostic tests or even bill insurance companies for medical services that were never provided.
In this case, prosecutors say injured workers underwent nerve testing at Hoffman’s imaging center that was non-invasive and should have been billed at about $35 per test.
Prosecutors accuse Hoffman of billing for an invasive test at $330 per procedure when that type of procedure wasn’t conducted. Sometimes, Hoffman allegedly billed for the invasive test 20 times per patient, despite the test never being done.
Hoffman is accused of inflating insurance billing from what should have been under $2,000 per patient to about $10,000 per patient.
In all, he’s accused of billing insurance companies over $9 million in this part of the alleged scheme.
Hoffman also ran a sleep center. He’s accused of filing insurance claims for 1,247 patients for epilepsy and seizure testing without ever conducting the tests on a single patient. Prosecutors say this center was nothing but a “medical mill” for the sole purpose of insurance billing without providing any legitimate treatment to any of his patients. For all 1,247 patients, Hoffman is accused of billing exactly $6,728 to insurance companies.
The doctor is accused of billing insurance companies over $8.4 million in the alleged sleep center scheme.
Has your company ever experienced medical testing for an injured worker that may have been unnecessary? How about billing for medical tests that weren’t even conducted? You can share your experience (or just your thoughts on this story) with others in the Comments Box below.