A California radiologist and three of his employees have been accused of a workers' compensation insurance fraud scheme involving more than $17 million in overbilling for unnecessary or never-performed procedures, according to a grand jury indictment unsealed on Monday.
The 181-page, 884-count indictment was returned in May by a grand jury against Dr. Sim Hoffman, a Newport Beach radiologist, and three of his employees: Dr. Thomas Heric, medical center administrator Beverly Mitchell, and medical bill collector Louis Santillan.
Hoffman and Mitchell have been charged with 883 felony counts of insurance fraud and one count of aiding and abetting the unauthorized practice of medicine. If convicted on all charges, they face a maximum of 892 years in prison.
Hoffman owns the imaging, sleep, and nerve test clinics Advanced Professional Imaging, Advanced Management Services, and Better Sleeping Medical Center, all in Buena Park.
In a press conference on June 13, Orange County District Attorney Tony Rackauckas described the alleged scheme's two parts. The first involved Hoffman billing for epilepsy and seizure testing on 1,247 patients from 2007 to 2008, allegedly without actually conducting the tests. The second involved Hoffman performing a simple nerve test (electromyogram [EMG]) on patients for workers' compensation claims, but allegedly billing insurance companies fraudulently for a much more expensive and complicated nerve test (single-fiber EMG).
Between 2007 and 2008, no patient received treatment from the defendants for the "disorders" that Hoffman and Heric diagnosed, Rackauckas said. Meanwhile, Hoffman received $8.4 million in allegedly fraudulent billings.
At Hoffman's nerve testing center, Advanced Professional Imaging, patients were referred to him for testing as part of a worker's compensation claim, Rackauckas said.
Hoffman would perform EMG tests that should be billed at approximately $35 per test. Hoffman and Mitchell are charged, however, with billing insurance companies for single-fiber EMGs, which can be billed at $330 per procedure -- and for allegedly billing for more than 20 of these tests per patient, resulting in more than $9 million in fraudulent billing.
"Hoffman, Heric, Mitchell, and Santillan created a $17 million medical mill at the expense of over 1,200 patients and the workers' compensation insurance system," Rackauckas said.
All four defendants are out on bail, with an arraignment scheduled for June 22. A hearing on the revocation of Hoffman's and Heric's medical licenses, a condition of the bail, is also set for that time, according to Rackauckas.
