As reported by the Northern District of Georgia branch of the U.S. Attorney’s Office last week, 62 year-old, John Oxendine has been sentenced to three and a half years in prison. The prison sentence is to be followed by three years of supervised release. After pleading guilty back in March, the former Georgia Insurance Commissioner was convicted for conspiracy to commit healthcare fraud in connection with unnecessary lab testing.
Oxendine submitted numerous fraudulent insurance claims.
Oxendine was also ordered to pay restitution in the amount of $760,175.34 as well as a $25,000 fine. As the report details, the Port St. Joe, Florida resident conspired with Dr. Jeffrey Gallups and others to submit fraudulent insurance claims. They were for medically unnecessary Pharmacogenetic, Molecular Genetic and Toxicology testing.
“Physicians associated with Dr. Gallups’ ENT practice were pressured to order these medically unnecessary tests from Next Health, a lab in Texas,” details the U.S. Attorney’s Office, “As part of Oxendine’s healthcare fraud scheme, Next Health agreed to pay Oxendine and Dr. Gallups a kickback of 50 percent of the net profit for eligible specimens submitted by Dr. Gallups’ practice to the lab company.”
Oxendine pressured doctors during a presentation.
As part of his scheme, Oxendine gave a presentation at the Ritz Carlton in Buckhead, Georgia. There, he pressured doctors who were part of Dr. Gallups’ practice to order the unnecessary tests. Next Health later submitted insurance claims requesting over $3 million in payments from private health insurers. As a result, the insurance companies paid more than $750,000 to Next Health. All the claims were fraudulent.
“Next Health then paid $260,000 in kickbacks to Oxendine and Dr. Gallups,” says the report, “Some patients were also charged for the tests, receiving bills of up to $18,000. To conceal the kickback payments, Oxendine and Dr. Gallups arranged for the payments to be made from Next Health to Oxendine Insurance Services, Oxendine’s insurance consulting business. Oxendine used a portion of the kickback money to pay a $150,000 charitable contribution and $70,000 in attorney’s fees for Dr. Gallups.”
A compliance officer at Dr. Gallups’ practice raised concerns about the kickbacks.
In response, Oxendine told Dr. Gallups to lie by claiming the payments were loans. He instructed Dr. Gallups to repeat the same lie when being questioned by federal agents about Next Health. During his own interview with the Atlanta Journal-Constitution, Oxendine falsely denied working with the lab company or receiving any money from the business.
U.S. Attorney Ryan K. Buchanan had the following to say about the case: “Oxendine abused his position as the former Georgia Insurance Commissioner by undermining the integrity of the state’s healthcare system when he conspired with a physician to order hundreds of unnecessary and costly lab tests. This case demonstrates our office’s commitment to work with our law enforcement partners to hold individuals accountable who prioritize personal greed at the expense of the public’s trust.”
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