Manhattan U.S. Attorney Announces $5 Million Settlment Of Civil Forfeiture Claim Against Dutchess County Medical Practice

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed, and simultaneously settled, a civil forfeiture lawsuit against the assets of Mid Hudson Medical Group, P.C. (“MHMG”). The Government’s action alleges that MHMG received millions of dollars in proceeds from two schemes to defraud Medicare, the New York State Insurance Fund, and private health insurance providers (collectively, the “Health Insurance Providers”). The stipulation and order of settlement (the “Settlement”) requires MHMG to forfeit $5 million to the United States. The Government submitted the Settlement for approval this afternoon to U.S. District Judge Vincent L. Briccetti, who is presiding over the matter, captioned United States v. $5,000,000.00 in U.S. Currency, 13 Civ. 7898 (VB).

Manhattan U.S. Attorney Preet Bharara said: “The laws are clear and formidable when it comes to the bilking of health insurance providers: you cannot be permitted to keep and enjoy illicit proceeds of fraud. This Office and its partners will make every effort to intercept such activity wherever we find it.”

According to the Verified Complaint and other publicly filed documents:

Between at least 2006 and July 2011, Spyros Panos, an orthopedic surgeon and MHMG shareholder, engaged in an unlawful scheme to defraud Health Insurance Providers, in which Panos submitted, and caused MHMG to submit, fraudulent information to the Health Insurance Providers regarding the nature and details of surgical procedures he performed. As a result, the Health Insurance Providers paid MHMG millions of dollars more than MHMG was entitled to receive for the actual work that Panos did perform. On October 31, 2013, Panos pled guilty to one count of engaging in a scheme to commit health care fraud, in a criminal case captioned United States v. Spyros Panos, 13 Cr. 800 (NSR).

Additionally, from approximately 2009 through June 2012, certain employees of MHMG, who were responsible for submitting requests for pre-authorization/certification from certain Health Insurance Providers for Magnetic Resonance Imaging tests (“MRIs”), submitted requests to Health Insurance Providers in which the employees included details regarding patients’ history that the employees knew were necessary in order to obtain the approvals, but which the employees had no reason to know was or was not truthful, and which in at least some cases was not truthful. As a result, Health Insurance Providers paid MHMG more for MRI tests than MHMG was entitled to receive.

Under the terms of the Settlement, MHMG is awarded credits for reimbursements it has already made to certain Health Insurance Providers, and MHMG is required to transfer an additional $3.67 million to the United States pursuant to an agreed-upon schedule. The Settlement amount represents an estimate of the amount of proceeds MHMG obtained from Health Insurance Providers as a result of the alleged unlawful activity and is not a final determination by the Government as to the loss amounts incurred by all Health Insurance Providers, collectively or individually, as a result of the unlawful activity.

Mr. Bharara praised the work of the United States Postal Inspection Service, the United States Department of Health and Human Services – Office of Inspector General, and the Federal Bureau of Investigation, and thanked the United States Department of Health and Human Services, Office of Counsel to the Inspector General and Office of General Counsel, the New York State Insurance Fund, and the New York Workers’ Compensation Board Office of the Fraud Inspector General for their assistance.

This case is being handled by the White Plains Division. Assistant United States Attorneys Lee Renzin and Daniel Filor are in charge of the case.

MHMG Forfeiture Stip Settlement.Filed
MHMG Forfeiture Complaint.Filed