Blair County doctor sentenced for role in insurance fraud
A Blair County doctor will spend up to 84 months in prison for his part in an insurance fraud scheme that involved a now-defunct Hempfield drug lab.
Dr. John H. Johnson, 55, of Hollidaysburg surrendered to federal authorities in Johnstown on Friday following his conviction on charges of tax fraud and conspiracy to violate the Anti-Kickback Statute, said acting U.S. Attorney Soo C. Song of the Western Pennsylvania District.
Johnson pleaded guilty to one count each of accepting kickbacks and failing to remit employment taxes.
Federal prosecutors said Johnson, an anesthesiologist who owned and operated a group of pain management clinics, received more than $2.3 million in “kickbacks” for referring patients to Universal Oral Fluid Laboratories from May 2011 to November 2013.
The drug testing and screening lab, founded by Washington County businessman William Hughes, opened in Jeannette in 2009 and later moved to Willow Crossing Road in Hempfield. The building is now vacant and up for sale.
Hughes has not been charged, but the investigation is ongoing, said Margaret Philbin, a spokeswoman for the U.S. Attorney’s Office in Pittsburgh.
“A physician’s decisions about what medical care to provide, and who will provide it, should be based upon the best interests of the patient, not a physician’s financial interests,” Song said. “(Johnson) abused his position of trust by accepting kickbacks for referring his patients to UOFL, and by failing to meet his tax obligations.”
The object of the conspiracy was for Johnson to receive cash payments from Universal and someone identified as Person No. 1 in exchange for referring Medicare and Medicaid patients to the lab, according to prosecutors.
The conspiracy called for Johnson to receive monthly kickback checks based on the terms of a “joint venture” between Johnson and Universal, the U.S. attorney said.
Under those terms, Johnson referred his patients from Lighthouse Medical LLC, including Medicare and Medicaid beneficiaries, to Universal for drug testing and related services. Universal, in turn, billed government and private insurers for the tests and “kicked back” to Johnson reimbursement amounts that exceeded agreed-upon thresholds — usually between $100 and $150, the U.S. attorney said.
Prosecutors said Hughes and the lab paid doctors kickbacks so they would exclusively use Universal for testing of all the oral swabs the doctors took from their patients. Universal received $3.4 million in reimbursements from Medicare and $1.1 million in reimbursements from Pennsylvania Medicaid based on Johnson’s referrals alone, the U.S. attorney said.
The sentence imposed by U.S. District Court Judge Kim R. Gibson included three years’ supervised release and an order to pay restitution to the IRS in the amount of $722,476.55 and to the U.S. Department of Health and Human Services in the amount of $2.3 million.
Johnson also must forfeit to the government $39,345 in cash that was seized from his Hollidaysburg residence in March 2014.
Of the prison sentence, 60 of the 84 months will run concurrent with another sentence recently imposed on Johnson by a federal judge in Florida. Johnson pleaded guilty to his role in a $172 million insurance fraud scheme, the U.S. attorney’s office in Miami reported.