Four more Texas health care executives charged in multimillion-dollar billing scheme

Four more Texas health care executives are charged in a multimillion-dollar billing scheme that already has resulted in a guilty plea from the CEO of a Texas hospital.

A federal grand jury has indicted Steven Berglund, Aaron Cerpanya, Adam Gardner and Cody Waddell on charges of health care fraud, wire fraud, aggravated identity theft and conspiracy to commit wire and health care fraud. Last year, former Palo Pinto General Hospital CEO Harris Brooks pleaded guilty in the $55 million insurance fraud scheme.

Berglund and Cerpanya co-owned Elite Healthcare in Farmers Branch. Gardner and Waddell founded MedHealth Solutions in Fort Worth.

From September 2017 to July 2018, they conspired with Brooks to run an “outside lab program” at Palo Pinto General Hospital to defraud health insurance companies, according to the indictment. In insurance claims, they said the hospital was conducting allergy and genetic tests for patients when in fact other companies had provided the tests, prosecutors say.

Because of its status as a rural hospital, Palo Pinto was a “lucrative target for the fraud scheme” as it received higher reimbursement rates from insurance companies than out-of-network labs, prosecutors say.

To keep the scheme a secret and prevent patients from complaining, the suspects agreed not to charge out-of-pocket fees and lied to patients that the tests had been conducted at the hospital, prosecutors say. The hospital also repackaged samples submitted for testing to make it appear it had conducted the testing, according to the indictment.

“In reality however, (the hospital) did not have the equipment on-site to perform the tests for which it submitted claims, and the patients for whom claims were submitted were receiving treatment at various spas and clinics throughout Texas and elsewhere, not (the hospital),” the U.S. Attorney for the Northern District of Texas said in a 2019 news release.

An Australian billing company used in the scheme submitted claims for $55 million for lab services, “the vast majority of which were fraudulent,” prosecutors say. The insurance companies paid the hospital over $8 million as a result. After the billing company and labs were paid, the remaining money was divided among the suspects, prosecutors say.

In March 2019, Brooks, the hospital CEO, was sentenced to five years of probation and fined $2.4 million.