Court Finds Sufficient Evidence for Healthcare Fraud Conviction - U.S. Fifth Circuit
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Court Finds Sufficient Evidence for Healthcare Fraud Conviction

Be careful what you bill for. The Fifth Circuit Court of Appeals upheld a Texas medical billing professional’s convictions for healthcare fraud this week, finding that there was sufficient evidence to support the jury’s verdict.

Sylvia Delgado, a self-professed medical billing expert with 30 years of experience in medical coding and billing, owned a billing company called Med Comp Electronic Billing. Delgado formed Synergy, a business to provide group psychotherapy counseling to the elderly, with Licensed Master Social Worker Robert Rael and Dr. Rafael Solis, a licensed psychiatrist, in 2005.

Dr. Solis was the medical director of Synergy. He performed initial evaluations of patients, prescribed medication, and conducted individual counseling sessions. Dr. Solis referred the patients to Synergy for group psychotherapy, which was billed under his Medicaid and Medicare numbers, even though he did not conduct or supervise the group sessions.

Rael agreed to conduct the group therapy sessions using Dr. Solis's billing numbers because Rael was not authorized under Texas law to have his own billing numbers. Delgado performed all of the billing, and split Synergy's Medicaid and Medicare billing proceeds with Rael.

Rael received 70 percent of the proceeds and paid for operating expenses. Delgado received 30 percent of the proceeds. Dr. Solis was initially not paid by Synergy, but started earning $2,000 per month in January 2005. Delgado sent more than 49,000 claims to Medicare and Medicaid between 2002 and 2005 through MedComp, and Synergy collected more than $1.4 million from the programs, reports ASC Review. In just over three years, Rael profited $508,953.10 and Delgado profited $388,059.20 from Medicaid and Medicare.

If that business strategy sounds too good to be true, that's because it was healthcare fraud. The scheme was illegal for a number of reasons -- like the fact that "therapy" offered should have been classified, at best, as adult daycare, which billed at a much lower rate. And the fact that Rael should not have been using Dr. Solis' billing number.

Another problem, which Delgado circumvented through her superior billing knowledge, was that Medicare and Medicaid do not permit billing for multiple therapy sessions for one patient in one day; Delgado billed up to six group therapy sessions per day per patient. That practice eventually caught Medicare's attention. Medicare's program integrity contractor flagged Dr. Solis because his office billed the group therapy code 17,000 times in one year, compared to his peer group's average of 500 claims.

Delgado was convicted in 2009 on healthcare fraud charges. She appealed the conviction to the Fifth Circuit Court of Appeals, arguing that there was not sufficient evidence to establish that she knew that therapy was fraudulent.

Noting that "the jury is free to choose among reasonable constructions of the evidence and the evidence need not exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt," the Fifth Circuit found there was sufficient evidence to support Sylvia Delgado's conviction.

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