On November 14, 2011, the U.S. Attorney’s Office for the Southern District of Texas announced that a physician was sentenced for fraud regarding private insurance, Medicare and Medicaid. Armando Chavez, a former physician and owner of the Chavez Medical Group in East Houston, was sentenced to 60 months for conspiracy and 70 months for each of three mail fraud charges, all to run concurrently. Chavez was also ordered to pay $3,821,082 in restitution.
The charges stem from improper billing at the Chavez Medical Group between 2005 and 2007 regarding endovenous laser ablation, a procedure used to repair varicose veins in the legs. Chavez instructed his staff to “unbundle” the billing codes for this procedure and to bill for individual steps in the procedure, resulting in greater reimbursement and payment for each patient. Additionally, Chavez submitted claims alleging he repaired all six veins for each patient, when in fact – in most cases – he repaired fewer than six veins. By alleging he repaired all six veins, Chavez was reimbursed at the highest possible rate. From 2005 through 2007, Chavez billed insurance companies and programs, including Medicare and Medicaid, a total of $14.1 million from which he was paid approximately $3.8 million.
A unique aspect of the prosecution of Armando Chavez is that the case involves not only government program fraud, but private insurance fraud as well. The harsh sentence indicates that the Department of Justice is cracking down harder than ever on all suspected fraud cases, not just abuse of Medicare and Medicaid programs. This underscores the importance of having good compliance plans.
