Fifteen Texas Doctors Agree to Pay over $2.8 Million to Settle Kickback Allegations

SHERMAN, Texas – Fifteen additional Texas doctors have agreed to pay a total of $2,831,280 to resolve False Claims Act allegations involving illegal kickbacks in violation of the Anti-Kickback Statute and Stark Law, and to cooperate with the Department’s investigations of and litigation against other parties, announced Eastern District of Texas U.S. Attorney Brit Featherston today.

“These settlements should reinforce the message that the Eastern District of Texas will not tolerate health care providers who seek to enrich themselves through kickback schemes,” said U.S. Attorney Brit Featherston. “We will continue to work with our agency partners to identify those who defraud our taxpayers and we will hold those who have engaged in the schemes responsible.”    

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory. The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlements announced today resolve allegations that fifteen Texas doctors violated the Anti-Kickback Statute and the Stark Law by receiving thousands of dollars in remuneration from nine management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital d/b/a Little River Healthcare (Little River), True Health Diagnostics LLC (True Health), and/or Boston Heart Diagnostics Corporation (Boston Heart). Little River allegedly funded the remuneration to certain doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals. 

• Louis Coates, D.O., of Garland, Texas, agreed to pay $87,694 to settle allegations that from September 26, 2016 to March 14, 2018 he received kickbacks from an MSO, Herculis MG LLC, in return for ordering laboratory tests from Boston Heart.

• Jason DeMattia, M.D., and Candice DeMattia, M.D., both of Tomball, Texas, agreed to pay $316,142 and $207,009, respectively, to settle allegations that from August 1, 2014 to December 31, 2016 they received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.

• Emanuel Paul (“E.P.”) Descant, II, M.D., of Spring, Texas, agreed to pay $256,466 to settle allegations that from January 5, 2015 through February 3, 2018 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from Little River.

• Mitchell Finnie, M.D., of San Antonio, Texas, agreed to pay $582,522 to settle allegations that from June 4, 2015 to July 11, 2017 he received kickbacks from two MSOs, Alpha Rise Health, LLC and Tango Rise Health Solutions LLC, in return for ordering laboratory tests from Boston Heart, True Health, and Little River.

• Mark Le, M.D., of Tomball, Texas, agreed to pay $57,900 to settle allegations that from May 9, 2016 to September 22, 2017 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.

• Richard Le, M.D., of Houston, Texas, agreed to pay $41,000 to settle allegations that from September 29, 2016 to August 24, 2017 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.

• Robert Jeremy Laningham, M.D., and Rodney Jason Laningham, M.D., both of Conroe, Texas, agreed to pay $470,560 to settle allegations that from August 8, 2015 through July 6, 2016, they received kickbacks from two MSOs, SYNRG Partners LLC and Transparity Associates LP in return for ordering laboratory tests from Boston Heart, True Health, and Little River.

• Andres Mesa, M.D., of Houston, Texas, agreed to pay $45,484 to settle allegations that from May 1, 2016 to January 9, 2018, he received kickbacks from an MSO, Transparity Associates LP, in return for ordering laboratory tests from Boston Heart and Little River.

• Melissa Miskell, D.O., of New Braunfels, Texas, agreed to pay $100,392 to settle allegations that from July 13, 2015 to December 14, 2017, she received kickbacks from an MSO, Alpha Rise Health, LLC, in return for ordering laboratory tests from Boston Heart and Little River.

• Marco Munoz, M.D., of Fort Worth, Texas, agreed to pay $54,280 to settle allegations that from July 7, 2015 to April 6, 2016, he received kickbacks from an MSO, Alpha Rise Health, LLC, in return for ordering laboratory tests from Boston Heart and Little River.

• Kozhaya Sokhon, M.D., of the Woodlands, Texas, agreed to pay $160,456 to settle allegations that from January 16, 2015 to May 18, 2018, he received kickbacks from two MSOs, SYNRG Partners LLC and Transparity Associates LP, in return for ordering laboratory tests from Boston Heart and Little River.

• Annie Varughese, M.D., of the Woodlands, Texas, agreed to pay $213,888 to settle allegations that from September 1, 2015 to November 17, 2017, she received kickbacks from three MSOs, SYNRG Partners LLC, Transparity Associates, LP, and North Houston MSO Group, Inc., in return for ordering laboratory tests from True Health and Little River.

• Paul Worrell, D.O., of Dallas, Texas, agreed to pay $237,487 to settle allegations that from October 9, 2015 to December 31, 2017, he received kickbacks from three MSOs, Ascend MSO of TX LLC, Eridanus MG LLC, and BDS Healthcare, LLC, d/b/a Vybrem Labs, in return for ordering laboratory tests from Boston Heart, True Health, and Little River.

As part of their settlements, the fifteen physicians have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law.

“The Anti-Kickback and Stark Statutes help protect the integrity of federal healthcare programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to pursue both individuals and corporations responsible for schemes that violate these important safeguards.”

“This outcome is the result of cooperation amongst law enforcement partners focused on upholding the integrity of federal healthcare programs,” said Miranda L. Bennett of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to pursue physicians engaging in improper financial relationships to ensure patients are receiving quality medical care.”

“Today’s announcement is another step forward by the Department of Defense, Office of Inspector General’s Defense Criminal Investigative Service (DCIS) and our law enforcement partners to protect the integrity of the military’s health care system, commonly known as TRICARE,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “We will continue to aggressively investigate and hold those accountable that take advantage of the U.S. Government and American taxpayers.”

“The VA Office of Inspector General actively investigates those in violation of the Stark Law and the Anti-Kickback Statute,” said Special Agent in Charge Jeffrey Breen of the South Central Field Office of the Department of Veterans Affairs Office of Inspector General (VA-OIG). “Today’s civil settlements demonstrate the VA OIG’s ongoing work to hold individuals accountable and protect the integrity of federal healthcare programs.”

Former True Health CEO Christopher Grottenthaler, former Boston Heart CEO Susan Hertzberg, former Little River CEO Jeffrey Madison, and others are defendants in a separate False Claims Act lawsuit in which the United States filed an amended complaint in May 2022. That pending case is captioned United States ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 (E.D. Tex.). If a defendant is found liable for violating the act, the United States may recover three times the amount of its losses plus applicable penalties.

The civil settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Texas and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG, DCIS, and VA-OIG. As a result of its efforts, the United States has recovered over $32 million relating to conduct involving Boston Heart, True Health, and Little River, including False Claims Act settlements with thirty-three physicians, two healthcare executives, and one laboratory. This matter and the related matters were handled by Assistant U.S. Attorneys James Gillingham, Adrian Garcia, and Betty Young, Senior Trial Counsel Christopher Terranova, and Trial Attorney Gavin Thole.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only, and there has been no determination of liability.

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