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Press Release

Former Waldo Chiropractor Pleads Guilty to $3 Million Medicare Fraud

For Immediate Release
U.S. Attorney's Office, Western District of Missouri

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former owner of a Kansas City, Mo., clinic pleaded guilty in federal court today to a $3 million Medicare fraud scheme.

Michael Kelly Miller, 59, of Temple Terrace, Fla., formerly the owner of Waldo Rehabilitation Health & Wellness in Kansas City, Mo., waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge Sarah W. Hays to a federal information that charges him with one count of health care fraud.

Miller, a licensed chiropractor, was the owner of Brookside Health Services, doing business as Waldo Rehabilitation Health & Wellness at 7337 Broadway, Kansas City, during the time period of February 2009 to December 2011. He currently practices at Miller Clinic for Optimal Health in Temple Terrace.

By pleading guilty today, Miller admitted that he submitted claims to Medicare for nerve block injections that were false and fraudulent because the nerve block injections were not medically indicated and necessary for the patients’ health per Medicare coverage guidelines. Between February 2009 and December 2011, the clinic billed Medicare approximately $3,083,454, and Medicare paid the clinic approximately $879,582 for nerve block injections.

Beginning in 2009, the clinic shifted its focus from primarily providing chiropractic services to purportedly diagnosing and treating neuropathy. This shift in focus was due, in part, to information Miller received from a third party promoting a new, “cutting edge” treatment for neuropathy, which included nerve block injections. At the time, Medicare had no specific coverage guidelines regarding the use of nerve block injections for peripheral neuropathy. Miller did not investigate or inquire whether Medicare considered nerve block injections to be medically indicated and necessary for patients experiencing neuropathy.

Miller’s patients typically received anodyne infrared light and electrical stimulation therapies two or three times per week for four to eight weeks. The clinic’s purported treatment of neuropathy was not supported by medical research studies or peer-reviewed medical publications, and would be considered an experimental or investigational treatment or alternative medicine.

During this time, most of the clinic’s patients were Medicare beneficiaries, and most of the clinic’s revenues were received from Medicare. Medicare will not cover experimental or investigational procedures and treatments or alternative medicine. Miller was aware of these Medicare requirements.

Based on Miller’s experience with Medicare, he knew and expected that the clinic would be paid less than the full amount sought in the claims submitted. For example, for nerve block injections, the clinic was paid approximately 29 percent of the claims submitted. Miller estimates that the reasonably foreseeable pecuniary harm and intended loss with respect to nerve block injections was more than $1 million but not more than $2.5 million.

Under the terms of today’s plea agreement, Miller will be sentenced to at least 15 months, and as much as 21 months, in federal prison. Miller must pay approximately $879,582 in restitution to Medicare, with the exact amount to be determined prior to sentencing. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

Diabetic Neuropathy

Diabetic neuropathy is a type of nerve damage resulting from diabetes, often damaging nerves in the legs and feet. Diabetic neuropathy is usually diagnosed based on the patient’s symptoms, medical history, and physical examination. While presently there is no medically recognized cure, treatment usually focuses on slowing the disease’s progression, controlling blood glucose, relieving pain, and restoring function. Type II diabetes, one of the underlying causes of neuropathy, is a manageable disease with medicine and dietary change.

This case is being prosecuted by Assistant U.S. Attorneys Cindi S. Woolery and Daniel M. Nelson. It was investigated by the Department of Health and Human Services, Office of Inspector General and the FBI.
Updated January 12, 2015