On June 6, 2018, a CEO and four physicians were charged in a superseding indictment as part of an investigation into a $200 million healthcare fraud scheme involving a network of pain clinics, laboratories, and other providers in Michigan and Ohio. The five defendants were previously charged in an original indictment on July 6, 2017. The superseding indictment alleges a long list of conduct that violates Federal fraud and abuse laws and Medicare requirements, including prescription of medically unnecessary controlled substances, administration of medically unnecessary injections, compensation to physicians based on the number of injections for which Medicare provided payment, and payment for referrals of Medicare beneficiary business.

The superseding indictment alleges as follows:

• Mashiyat Rashid was the CEO of Tri-County Wellness, which owned and operated numerous pain clinics, laboratories, and other providers in Michigan and Ohio. From 2008 until 2017, Rashid and several physicians working in Rashid’s clinics prescribed to Medicare beneficiaries medically unnecessary controlled substances, including oxycodone, hydrocodone, and oxymorphone, on the condition that the beneficiaries who wished to obtain controlled substances submit to injections that were expensive, painful, repetitive, and medically unnecessary. The physicians were paid based on the number of injections that Medicare paid for, regardless of medical necessity.
• Rashid caused physicians to order unnecessary urine drug tests from a laboratory that he owned.
• Following a ZPIC review that found that 100 percent of the Medicare injection claims and 95 percent of the Medicare laboratory claims were not eligible for Medicare reimbursement, the defendants created new companies and enrolled them in Medicare, in some instances changing only the name of the company on the door to the medical practice and/or inventing new suite numbers.
• Rashid paid kickbacks to obtain patients and solicited illegal kickbacks and bribes for physicians to refer Medicare beneficiaries to certain home health agencies, laboratories, and diagnostic providers, without regard to medical necessity.

Each of the five defendants was charged with one count of conspiracy to commit health care fraud and wire fraud. Rashid was also charged with four counts of healthcare fraud, one count of conspiracy to defraud the United States and pay and receive health care kickbacks, one count of payment of kickbacks, one count of receipt of kickbacks, and two counts of money laundering. The four physicians were additionally charged with one count of health care fraud.

The case is pending before U.S. District Judge Denise Page Hood of the Eastern District of Michigan. Trial has been scheduled to begin on July 31, 2018.

The Department of Justice’s press release is available here. The superseding indictment is available here.