Surgeries by unlicensed assistant part of $150m insurance fraud, say prosecutors

Physician assistant not trained to perform surgery operated on hundreds while surgeon billing for procedures hid massive insurance fraud conspiracy

Thirteen people have pleaded not guilty in an alleged $150m insurance fraud scheme which prosecutors say involved surgery by an unlicensed assistant. Photograph: Medioimages/Photodisc/Getty Images

A physician assistant who wasn’t licensed or trained to perform surgery operated on hundreds of patients while the orthopedic surgeon who billed for the procedures schemed with colleagues to hide a massive insurance fraud conspiracy, Los Angeles prosecutors said.

On Friday prosecutors opposed reducing bail for 13 people who have pleaded not guilty in the alleged $150m fraud scheme and outlined the complexity of an operation they say spanned a decade and led to unnecessary and scarring surgeries for patients.

The indictments “paint a clear picture of a sophisticated and savvy group of criminal conspirators who placed profits above the health and welfare of the thousands of patients they purported to treat,” deputy district attorney Catherine Chon said in court papers filed Thursday. “The callous disregard and extreme indifference that was shown to unsuspecting victims is reflected in the overt acts alleged.”

Dr Munir Uwaydah and his associates allegedly prescribed unnecessary expensive medications, billed two-minute doctor’s appointments as hour-long examinations, and doctored MRI results and medical records to justify unnecessary operations.

Fifteen people have been indicted in the scheme alleged to have paid marketers and workers’ compensation lawyers up to $10,000 a month in kickbacks to funnel patients to Uwaydah’s clinic. They got bonuses if the patients were candidates for surgery and additional cash if they received operations, the indictment said.

In some instances, even the patients were paid if they were reluctant to go through with the expensive surgeries, Chon said.

Uwaydah, 49, was arrested in Germany on 9 September and is awaiting extradition, prosecutors said. It was not clear if he had a lawyer yet.

Prosecutors said Uwaydah fled to his native Lebanon in 2010 after they began investigating fraud as a possible motive in the 2008 strangling of Juliana Redding, an aspiring model he once dated.

Uwaydah denied any involvement in the killing and was never charged. His former personal assistant and office manager was charged, but she was acquitted of murder.

The office manager, Kelly Soo Park, 49, is now being held on $18.5m bail in the fraud case. Park’s lawyer said he didn’t think prosecutors could connect her to the fraud.

But Chon said Park placed her name on shell companies and bank accounts for Uwaydah and attended weekly meetings where the doctor and others discussed ways to hide his assets from insurers, creditors and law enforcement.

The meetings included discussions of a state medical board case against Uwaydah over allegations he allowed physician assistant Peter Nelson to perform surgeries at an Orange County hospital in 2005.

“The participants in the meeting were well aware that Nelson was in the operating room engaged in the very practice that the medical profession’s regulatory agency had clearly stated was inappropriate,” Chon wrote.

Uwaydah and Nelson are charged with 21 counts of aggravated mayhem – each for a different patient – though Chon said those represent a fraction of the hundreds of procedures Nelson performed. Patients were scarred for life, and some required multiple corrective surgeries.

Nelson’s lawyer, Louis Shapiro, said the state attorney general was seeking to have his client’s license suspended. Shapiro said it was premature to comment on the case, but he noted that physician assistants could perform some surgical procedures under the supervision of doctors.

He didn’t seek a reduction in Nelson’s $21m bail.

Nine other defendants, including Park, are charged with mayhem in aiding the scheme. If convicted, the charge carries a possible life sentence. The defendants also face dozens of charges related to insurance fraud.

The medical board revoked Uwaydah’s license two years ago because he left the state and never completed probation after settling several alleged violations without acknowledging guilt, spokeswoman Cassandra Hockenson said. One count involved gross negligence for allowing Nelson to begin surgery without his presence.

Nelson, 44, has been cited twice by the state physician assistant board. The most recent violation, for failure to maintain proper records, led to a $1,500 fine against Nelson after a patient complained about him failing to provide anesthesia while removing two feet (60cm) of surgical gauze left for a month in an incision from shoulder surgery, according to public records.

Attorney Eric Bryan Seuthe sued Uwaydah for malpractice for leaving gauze in Jenniffer Milone’s incision, which led to a painful infection when she returned to the doctor’s office less than a week after surgery.

Despite being given antibiotics, her fever and pain did not improve until the gauze was discovered by X-ray a month later and removed by Nelson.

Seuthe dropped out of the lawsuit, and it’s not clear if it was resolved.

Nelson performed the initial shoulder surgery, prosecutors said.

The Guardian

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