Physicians face possible prison, $900K in payments and penalties, for health care fraud allegations

Federal investigators detail separate cases involving criminal charges and civil claims.

A Texas physician could face up to 20 years in prison for pleading guilty to a charge related to kickbacks from Medicare fraud.

Meanwhile, a New York physician will pay $900,000 to resolve civil claims for up-coding billings for medical services including smoking cessation counseling services that were improperly documented, and alleged improper opioid prescriptions.

The U.S. Department of Justice (DOJ), the U.S. Attorney’s Office for the Northern District of New York, and New York Attorney General Letitia James published news releases about the unrelated cases.

Criminal charges

In the criminal case, Daniel R. Canchola, 49, of Flower Mound, Texas, received $466,000 for electronically signing orders for durable medical equipment (DME) and cancer genetic testing. Canchola knew the orders “were used to submit more than $54 million in false and fraudulent claims to Medicare,” according to a DOJ news release.

From August 2018 to April 2019, Canchola received about $30 for each doctor’s order he signed for the unneeded medical equipment and cancer tests. “The Medicare beneficiaries for whom Canchola prescribed DME and cancer genetic testing were targeted by telemarketing campaigns and at health fairs and were induced to submit to the cancer genetic testing and to receive the DME regardless of medical necessity,” according to DOJ.

Canchola pleaded guilty to conspiracy to commit wire fraud and is scheduled to be sentenced on March 15, 2023, according to DOJ.

The U.S. Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit investigated the case.

In October 2019, Canchola and the Texas Medical Board entered an agreed order of suspension for Canchola’s medical license until superseded by further action of that board. The Texas Medical Board action noted the federal government charged Canchola in or about September 2019, according to the board’s online license records.

Civil case

In New York, Ahmad M. Mehdi, MD, and Mehdi’s medical practice in Groton and Tully, New York, will pay $260,000 to reimburse the state’s Medicaid program. Mehdi will pay a penalty of $308,750 to the state and $331,250 to the federal government to settle the claims.

From January 2012 through September 2018, “Dr. Mehdi engaged in up-coding of billings for medical services and billed for smoking cessation counseling services that were not sufficiently documented,” according to the attorney general’s office. “He submitted, or caused to be submitted, those claims for payment to the Medicaid program and to various Medicaid Managed Care entities, and these government payors relied on those fraudulent claims to pay him.”

As of Oct. 27, 2022, it appeared Mehdi’s medical license remained registered through March 2023, according to the online records of New York State Education Department’s Office of the Professions.

Fraud investigations

Earlier this year, federal investigators published an annual report claiming more than $5 billion in health care fraud judgments and settlements, a record amount, for the 12 months ending Sept. 30, 2021. HHS, DOJ, and other government agencies collaborate for the Health Care Fraud and Abuse Control Program, which in 25 years has netted more than $49.596 billion in health care fraud judgments and settlements.

Just a few weeks later, announced another medical fraud investigation worth more than $1.2 billion, with criminal charges against 36 defendants around the country. HHS published a fraud alert warning physicians and other health care workers about clues that could indicate bogus claims involving telehealth.