"Two Miami men were convicted Monday for conning vulnerable addiction treatment patients, rural hospitals and health insurance companies out of $1.4 billion in a health-care fraud scam that spanned Florida, Georgia and Missouri, according to authorities," Omar Rodriguez Ortiz reports for the Miami Herald. "Jorge Perez, 62, and Ricardo Perez, 59, were found guilty of conspiracy to commit health-care fraud and wire fraud, five counts of health-care fraud, and conspiracy to commit money laundering of proceeds greater than $10,000."
To help rural hospitals stay open, Medicare and some insurers reimburse them for laboratory services at higher rates. The defendants exploited that through Jorge Perez's company EmpowerHMS: "They promised to save the rural hospitals from closure by converting them into laboratory testing sites, but instead billed health-insurance companies for fraudulent laboratory testing worth hundreds of millions of dollars in a sophisticated and years-long billing scheme," Ortiz reports. "The plot made it appear that the rural hospitals themselves did the laboratory testing when, in most cases, it was done by testing laboratories controlled by others, the department added." When insurers began questioning the billings, the company would move on to another hospital and leave the one they had used for scams in the same or worse financial shape.
It's only the latest such scheme Jorge Perez has been involved in. A Kaiser Health News investigation in 2019 detailed how Perez and his company, EmpowerHMS, used hospitals in Arkansas, Kansas, Missouri, Oklahoma, Tennessee, and more to perpetrate billing scams. Most of the hospitals EmpowerHMS managed or owned have shut down.
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