CA Doctors Charged with Over 880 Counts of Fraud

Yesterday was a very bad day for one Newport Beach radiologist. Authorities state that Dr. Sim Carlisle Hoffman ran a scheme that overbilled workers’ comp insurance for $17 million, leading to almost 900 counts of felony insurance fraud.

According to the Daily Pilot, a grand jury transcript and a 181-page indictment were released on June 13th by the Orange County district attorney’s office and the California Department of Insurance listing 884 charges against Dr. Hoffman.

Three others were also charged: Dr. Thomas Michael Heric of Malibu, Louis Umberto Santillan of Chino Hills, and Beverly Jane Mitchell of Westlake Village.

They are all accused of billing insurance companies for more expensive and sometimes unnecessary procedures that may or may not have even been performed.

“It is no secret that these types of fraud are resulting in higher insurance rates and hemorrhaging California businesses,” District Attorney Tony Rackauckas said. “We need to end these types of medical fraud mills … Let’s end unethical doctors, unscrupulous dealings and patients being treated like walking ATMs.”

Hoffman was the owner of three medical facilities in Buena Park: Advanced Professional Imaging, Advanced Management Services and Better Sleeping Medical Center. He allegedly used all of these companies to overbill the city of Los Angeles and 18 different insurance providers.

Hoffman and Mitchell, who was serving as the administrator in charge of insurance billing, were each charged with 883 felony counts of insurance fraud plus one felony charge of aiding and abetting the unauthorized practice of medicine.

Heric, who was working as a neurologist, was charged with 296 counts of insurance fraud and felony aiding and abetting the unauthorized practice of medicine. He could face up to the maximum of 315 years in state prison if he gets convicted of all charges.

Santillan, who worked as a bill collector, was charged with 141 felony counts of insurance fraud. He faces a maximum of 150 years in state prison.

This isn’t the first instance of these kinds of charges for Hoffman though. According to the NewportBeachPatch and Orange County District Attorney Tony Rackauckas:

Dr. Hoffman was disciplined in 2001 by the Medical Board of California for similar unethical medical practices.” Hoffman had Heric “study” patients and write reports on their status, Rackauckas said. “Heric’s so-called `studying’ of patients involved using a made-up formula entirely of his own creation that is not recognized in any medical community,” Rackauckas said.

Heric was also previously convicted of felony fraud back in 2008 for Medicare and Medi-Cal fraud and had his license suspended for 60 days.

Santillan, who has no college degree or certification, is accused of collecting more than $800,000 in commissions from fraudulently received insurance payments over two years, Rackauckas said. At the nerve-testing center, patients underwent painful testing that cost $330 instead of a much-less invasive exam that cost $35, Rackauckas alleged. Only two doctors in California are qualified to perform the more expensive and invasive test, he added. “Hoffman is not one of those two doctors,” the prosecutor said, “and Hoffman didn’t just bill for one Single Fiber EMG per patient. According to his bills, the patients went through this painful procedure over 20 times each.”

One example was a 56-year-old woman who was hurt when she tripped over some boxes at work, injuring her wrist and ankle. She was referred to Hoffman, who had her undergo a sleep study, MRI and nerve testing, Rackauckas said. She “was never told the results of her diagnostic tests.” “Months later, she was informed by her attorney that her claim had been denied by the insurance company.”  Hoffman has still pursued payments –which total over $15,000– from the unidentified woman through liens.

“These patients were used as pawns in Hoffman’s piggy bank,” Rackauckas alleged. The four “created a $17 million medical mill at the expense of over 1,200 patients and the workers’ compensation insurance system,” Rackauckas charged.

The alleged fraud that started this whole mess was brought to light by a complaint to the insurance commissioner’s office in July of 2008 by Zenith Insurance Co.

“It’s outrageous, and the prosecution announced today will send a clear signal to medical providers,” Jones said. “We’re taking it seriously as we should because it’s a drag on our economy.” The four were indicted May 11, but the grand jury indictments were not unsealed until today.

All four defendants were released after making bail and are expected to appear at the Central Justice Center in Santa Ana on June 22nd for their arraignment. They face a maximum of 892 years in state prison, if convicted on all charges. Hoffman and Heric will also have a hearing on the revocation of their medical licenses.