The indictment alleges that clinic owner Robert Burns Jr., DC, and his two associates, William C. Filcheck, DC, and Scott G. Taylor, DC, committed health care fraud by performing services under the name and authority of the clinic's medical doctor (who was not on the premises when the services were rendered), and for billing medically unnecessary services.
Dr. Halstead was indicted for the advice he gave Dr. Burns in setting up the "MD/DC" clinic, and for counseling some of the allegedly illegal treatment and business practices. The indictment questioned the legitimacy of the MD/DC business model as practiced by Dr. Burns and his associates.
The trial began on Jan. 13, 2003; on Feb. 4, 2003, a Federal Trial Jury returned guilty verdicts on Drs. Halstead, Filcheck and Taylor. Dr. Burns, who was arrested in Ireland on Jan. 14, 2002, is currently appealing extradition to the United States to face the charges contained in the indictment.
Drs. Halstead, Filcheck and Taylor were found guilty of Count 1: "engaging in a conspiracy from September 1993 and continuing through May 1997 to commit mail fraud and health care fraud in connection with the operation of Priority One, a multi-disciplinary clinic employing both chiropractors and medical doctors." According to the indictment, the defendants submitted false claim forms to health care benefit programs, including Medicare, and private insurance companies for more than $2.8 million for tests, treatments and other services. The indictment charged that the claim forms submitted fraudulently claimed that the treatment and services were provided by a medical doctor who had determined that they were medically necessary and were performed as described on the claim form. The indictment also charged that, in fact, the treatment and services were performed by the chiropractors, and the fraudulent claims were part of a scheme for the chiropractors to get paid for additional services by evading limitations on chiropractic treatment in many health care benefit programs. The indictment also charged that Dr. Halstead, of Practice Systems, advised the chiropractors how to set up and execute the scheme.
In addition, the three defendants were convicted on Counts 2 through 15 of "executing the scheme to commit health care fraud."
Dr. Halstead was individually convicted on Count 16: "engaging in a money-laundering conspiracy with respect to transferring funds," involving the transfer of money from Dr. Burns' practice to his management company, Virginia Health Care Management, which controlled Priority One through management contracts and lease agreements.
Dr. Halstead was also indicted on Counts 16 through 26 of "specific money laundering transactions."
The doctors face a maximum exposure of five years imprisonment and a fine of $250,000 on Count 1 of the indictment, and 10 years imprisonment and a fine of $250,000 on Counts 2 through 15 of the indictment. Dr. Halstead also faces a maximum exposure of 20 years imprisonment and a fine of not more than $500,000, or twice the value of the property involved (whichever is greater), on Counts 16 through 26 of the indictment.
Richard Jaffe, Dr. Halstead's attorney, had this to say about the verdict:
"Ron Halstead and I are obviously extremely disappointed with the jury verdict against him. The trial was lengthy and involved complicated medical/legal issues. In this case, the clinic owner engaged in improper billing under a medical doctor's name without the doctor having knowledge of and/or providing adequate input in the treatment being given by chiropractors and other ancillary health providers. The clinic owner fled the country leaving two junior chiropractors and his consultant to defend themselves. Unfortunately, the jury cast a wide net, and decided to hold Ron responsible for advising the clinic owner how generally to operate an MD/DC clinic. They did this despite the fact that the clinic owner's actions were directly contrary to Ron's advice, and all people knowledgeable about the matter testified that Ron did not know of the improper billing on the part of the clinic. But such are the vagaries of jury trials. I expect that we will continue to fight this case through post-trial proceedings and appeal.
"As a posttrial note, I would expect that having won this case, the federal government will continue and increase its efforts against the MD/DC model and those who provide professional services to these entities. I would advise all of you involved in this business to be very, very careful."
All three doctors are free on bond pending sentencing.
References
- Consultant Ron Halstead,DC, indicted on conspiracy and health care fraud. Dynamic Chiropractic, April 8, 2002. www.chiroweb.com/archives/20/08/05.html
- The MD/DC business model: an interview with attorney Richard Jaffe, Esq." Dynamic Chiropractic, July 1, 2002. www.chiroweb.com/archives/20/14/15.html.
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