Federal Investigation Into Spine Surgeries Uses Mob Laws to Target Health Care Fraud
By Fred Schulte
A search warrant recently unsealed in a Massachusetts federal court focuses on a Texas consulting company that facilitates spine surgery and other medical care for victims of car crashes. The 2019 search warrant details an investigation into alleged health care fraud by the Texas firm, Meg Health Care. The investigation, which alleges the Texas company accepted thousands of dollars in bribes from a Massachusetts-based medical device company, is using a lesser-known law enacted in the 1960s to stop organized crime racketeering across state lines. Because federal anti-kickback statutes do not cover medical care that is paid for privately, the search warrant is claiming there were violations of the federal Travel Act. According to Dallas attorney Chris Davis, who specializes in government investigations, the act gives federal prosecutors jurisdiction in cases "where you don't have state or federal money involved." Meg Health arranges spine surgery and other medical treatment using "letters of protection" (LOPs), which are legal contracts under which patients consent to pay medical bills using the proceeds from a lawsuit or other claims against the individual(s) responsible for their injuries. SpineFrontier, the Massachusetts medical device company, and two of its executives were indicted last fall on charges of paying kickbacks to surgeons. No charges have been filed against Meg Health Care or its owners. However, the search warrants lists payments of more than $90,000 in 10 checks reportedly sent by SpineFrontier to Meg Health Care between 2017 and 2018. The funds were used as a bribe for referring patients for procedures using products from SpineFrontier, investigators claim. They allege that one of the owners of Meg Health Care, a personal injury attorney, directed patients with LOPs to an area neurosurgeon who used SpineFrontier products in surgeries at two Dallas-area medical facilities. "In exchange for attorney [Manuel] Green's referral, SpineFrontier agreed to pay attorney Green forty percent (40%) of the revenue SpineFrontier received in connection with those surgical procedures as a bribe," according to the search warrant affidavit. Jonathan Halpern, a New York white-collar criminal defense attorney, says that using the Travel Act in a case like this one reflects "an aggressive expansion" of the federal government's power to prosecute health care fraud.
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