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Press Release

Former Hospital CFO Charged With Health Care Fraud

For Immediate Release
U.S. Attorney's Office, Eastern District of Texas

Department of Justice
Office of Public Affairs

          TYLER, Texas – The former Chief Financial Officer for Dr. Tariq Mahmood’s Texas hospitals has been charged with health care fraud violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Joe White, 66, of Cameron, Texas, was indicted by a federal grand jury on Jan. 22, 2014, and charged with making false statements to the Centers for Medicare and Medicaid Services (CMS) and aggravated identity theft.  White appeared for an arraignment hearing today before U.S. Magistrate Judge John D. Love.

The American Recovery and Reinvestment Act of 2009 established incentive payments under the Medicare and Medicaid programs for eligible professionals and eligible hospitals that meaningfully use Certified Electronic Health Record Technology.  The incentive programs were created to promote the adoption of health information technology and encourage the electronic exchange of health information in order to improve the quality and lower the cost of health care in the United States.  Upon meeting certain conditions, an eligible hospital could qualify for incentive payments from CMS if the hospital attested that it had meaningfully used Certified Electronic Health Record Technology for the prior fiscal year.

According to the indictment, on Nov. 20, 2012, White falsely attested to CMS that Shelby Regional Medical Center (Shelby Regional) met the meaningful use requirements for the 2012 fiscal year.  However, Shelby Regional relied on paper records throughout the fiscal year and only minimally used electronic health records.  To give the false appearance that the hospital was actually using Certified Electronic Health Record Technology, White directed its software vendor and hospital employees to manually input data from paper records into the electronic health record (EHR) software, often times months after the patient was discharged and after the end of the fiscal year.

The indictment further alleges that White falsely attested to the hospital’s meaningful use by using another person’s name and information without that individual’s consent or authorization.  As a result of the false attestation, CMS paid Shelby Regional $785,655.00.  In total, hospitals operated by Dr. Mahmood, including Shelby Regional, were paid $16,794,462.66 by the Medicaid and Medicare EHR incentive programs for fiscal years 2011 and 2012.

“As more and more federal dollars are made available to providers to adopt Electronic Health Record systems, our office is expecting to see more cases like this one,” said Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services Office of Inspector General's (OIG) Dallas Regional Office.  “The Office of Inspector General is committed to protecting the millions of taxpayer dollars used to pay providers to adopt Electronic Health Record systems.”

If convicted, White faces up to five years in federal prison for making a false statement and up to two years in federal prison for aggravated identity theft.

This case is being investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), and the Federal Bureau of Investigation.  Assistant U.S. Attorney Nathaniel C. Kummerfeld and Special Assistant U.S. Attorney Kenneth C. McGurk are prosecuting this case.

A grand jury indictment is not evidence of guilt and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Updated March 12, 2015