Forrest Park: A Cautionary Tale

I am going to preface this piece by stating I know almost all of the physicians indicted in this case. They are incredibly skilled physicians who provided quality care. Those who lost their medical licenses will leave a void in our local healthcare community.

As someone who once had dreams of becoming a lawyer, I find this case fascinating. It has forever changed long-standing healthcare practices across the nation. When the prosecution prevailed, the Federal agencies involved publicly announced they successfully prosecuted a landmark case that will allow them to target physicians, hospitals and other healthcare facilities around the country to “crackdown” on bribery and kickbacks in the healthcare field. 

Before the Forrest Park Medical Center (FPMC) case, the arrangements that are now considered Federal crimes would have been investigated by state or local law enforcement and were mostly ignored. I am not defending those who were found guilty, but the underlying principals remind me of the large corporations (looking at you Amazon) who have had years where they avoided paying federal taxes. As difficult as it is to comprehend, they did not pay taxes because they did not owe any. They took advantage of the tax codes based on the advice of their team of CPAs and accountants. According to at least one of the FPMC defendant’s testimony, the administrators of this facility did what they did partially because their legal counsel told them they could. They followed similar standard practices many facilities did and were under the assumption at least the marketing and advertising agreements were legal. As advised, they avoided caring for those with federally funded insurances, such as Medicare, Medicaid, and Tricare because they operate under strict Federal laws that are routinely investigated and prosecuted by Federal authorities for health care fraud. Arrangements covering services reimbursed through private insurers were understood to fall under state criminal statutes. However, states rarely enforce the laws, tempting administrators to create pay to play schemes that are lucrative for both referring physicians and facilities and are considered legal. Or, if not exactly legal, then most administrators thought it worth the risk.

In other words, before the Forrest Park Medical Center (FPMC) case, many health care facilities first determined the types of marketing arrangements they wanted to establish with doctors, then looked for lawful ways to structure them. Recall, FPMC had obtained legal advice and understood their agreements to be legal. However, once the federal government chose to federalize state bribery and anti-kickback laws through the application of the Travel Act to interstate commerce regarding payments by private insurers, simply excluding reimbursements by federally-funded programs is now ineffective and a Federal crime. 

President John Kennedy signed the Travel Act into law in 1961. The Travel Act’s broad language makes it a powerful tool to combat illegal activity across a broad range of legal theories. It can easily convert a violation of state laws, such as extortion or commercial bribery, into a federal crime if the accused used interstate or foreign travel, mail, or any facility in interstate or foreign commerce to facilitate the unlawful activity. This could be as simple as using a telephone, the mail, email or even the internet. Violation of the Travel Act carries hefty fines and prison sentences. The FPMC case was the first of its kind and was investigated through the U.S. Office of Personnel Management Office of Inspector General, the Federal Bureau of Investigation, the U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration, the U.S. Department of Defense – Defense Criminal Investigative Service, and Internal Revenue Service Criminal Investigation, with assistance from the Food and Drug Administration Office of Criminal Investigations. The defendants were charged with crimes such as conspiracy, commercial bribery, receiving kickbacks, paying kickbacks, and money laundering.

The 21 indicted individuals (owners, administrators, physicians, and a nurse) were charged in a $200 million scheme that provided financial kickbacks for referring lucrative patients (those with high-reimbursing out-of-network private insurance) to FPMC. FPMC billed the patients’ insurance plans well over a half a billion dollars and collected over two hundred million dollars in paid claims from 2009 to 2013. Instead of billing patients for out-of-network co-payments, FPMC assured patients they would pay in-network prices. Forrest Park administrators then concealed the patient discounts and wrote off the difference as uncollected “bad debt.” They used shell companies, consulting contracts, marketing agreements, falsified leases, and bogus job titles to funnel millions illegally to the doctors. More than $40 million in kickbacks were paid to the doctors and were disguised as consulting fees or marketing dollars. The physicians found guilty earlier this year were given a percentage of the money collected based on the number of surgeries they referred to Forrest Park. It was said during the trial that this is a case of “Surgeries for dollars. And dollars for surgeries.”

Of the 21 indicted, ten pled guilty before going to trial, charges were dropped against one individual, one received a separate trial, and nine were tried together (including five physicians). Seven of the nine were found guilty, one physician was acquitted, and one ended in a hung jury. The principal witness, Michael Alan Beauchamp, made a deal to avoid charges of embezzlement and prosecution for 18 other felonies which could have carried a sentence of up to 130 years in prison. The physicians face up to 30 years in federal prison and have lost their medical licenses. Prosecutors announced last week they are seeking to seize any funds or property that can be tied to the illegally earned proceeds.  

From Wilton McPherson “Mac” Burt, Forest Park’s managing partner, the government is seeking $4,560,852.33. Mr. Burt was found guilty on 10 of 12 counts, including one count of conspiracy, two counts of paying kickbacks, six counts of commercial bribery in violation of the Travel Act, and one count of money laundering, and now faces up to 65 years in federal prison.

From Jackson Jacob, owner of the shell companies through which some of the bribes were routed, the government is seeking $526,102.13. Mr. Jacob was found guilty on four of 14 counts, including conspiracy and three counts of paying kickbacks, and now faces up to 20 years in federal prison.

From Michael Bassem Rimlawi, a spinal surgeon, the government is seeking $8,130,000.00. (A portion of that money would be jointly and severally liable with his partner, Dr. Doug Won.) Dr. Rimlawi was found guilty on three of four counts, including conspiracy and two counts of receiving kickbacks, and now faces up to 15 years in federal prison

From Shawn Mark Henry, a spinal surgeon who invested in FMPC, the government is seeking $840,000.00. Dr. Henry was found guilty on three of three counts, including conspiracy, commercial bribery, and money laundering, and now faces up to 30 years in federal prison.

From Mrugeshkumar Shah, a pain management doctor, the government is seeking $67,850.00. Dr. Shah was found guilty on four of four counts, including conspiracy, two counts of paying kickbacks, and one count of commercial bribery, and now faces up to 20 years in federal prison.

From Iris Kathleen Forrest, a nurse who recruited and preauthorized worker’s comp requests, the government is seeking $463,600.00. Ms. Forrest was convicted on two of two counts, including conspiracy and paying kickbacks, and now faces up to 10 years in federal prison.

Prosecutors had previously filed a motion for entry of a forfeiture money judgment against Dr. Douglas Sung Won, who is currently facing bankruptcy proceedings:

From Dr. Won, a spinal surgeon who partnered with Dr. Rimlawi, the government is seeking $9,122,500.00. (A portion of that money would be jointly and severally liable with Dr. Rimlawi.) Dr. Won was found guilty on one of two counts, conspiracy, and now faces up to 5 years in federal prison.

The government is also seeking $8,255,000.00 from Dr. Wade Neal Barker, one of Forest Park’s founding doctors, who pleaded guilty to conspiracy to pay and receive healthcare bribes and kickbacks as well as aiding and abetting commercial bribery before trial and agreed to testify for the prosecution.

In total, the government is seeking $17,355,904.46 from the defendants convicted at trial, plus an additional $8,255,000.00 from Dr. Barker, for an overall total of $25,610,904.46 to date.

In addition to any forfeiture ordered by the Court, the Forest Park defendants may be required to pay mandatory restitution to the affected insurance companies – an amount that will likely far exceed the amount sought in the money judgments.

The defendants await sentencing and are currently free on bail. 

References:

  1. https://www.justice.gov/usao-ndtx/pr/usao-seeking-17m-money-judgments-against-defendants-convicted-forest-park-trial
  2. https://www.darkintelligencegroup.com/wp-content/uploads/FOREST-PARK-Med-Ctr-INDICTMENT-1.pdf
  3. https://www.bizjournals.com/dallas/news/2019/02/22/surgeons-in-forest-park-trial-why-are-we-here.html
  4. https://www.dallasnews.com/news/crime/2019/04/09/surgeons-hospital-owners-convicted-massive-kickback-scheme-involving-forest-park-medical-center
  5. https://healthcare.dmagazine.com/2019/04/10/forest-park-fraud-trial-results-in-seven-guilty-verdicts/
  6. https://www.alston.com/en/insights/publications/2018/08/travel-act-gets-mileage-in-health-care-cases

Cynthia R Stuart DO

Dr. Stuart is Board Certified in Family Medicine. Originally from Georgia, she spent most of her youth in Miami, Florida and has been a Texas resident since the early 1990s. She attended UNTHSC-Fort Worth and completed her residency at UTSW/Methodist Hospital System where she was Chief Resident in her senior year. She is an Associate Professor at UTSW and UNTHSC, participating as a preceptor for medical students and residents. She completed a two-year course at SMU Cox School of Business in Advanced Leadership that enables her to advocate for quality health care providers and local public health programs in her community. She is the head of the Credentials Committee, sits on the Medical Executive Committee and the Ethics Committee at Baylor Scott and White Hospital of Carrollton. She has appeared on numerous news and radio programs to educate the public about various health topics. Dr. Stuart has managed her private practice in Carrollton since 2005 and is now a Direct Primary Care Physician. 

  5 comments for “Forrest Park: A Cautionary Tale

  1. gilbert w templeton
    September 7, 2019 at 8:22 am

    Forgetting the “legality” of the activities undertaken: for a physician to profit directly from referring patients is clearly unethical and reprehensible!! G W Templeton MD

  2. Christopher Dobrose
    September 3, 2019 at 2:06 pm

    The reason the anti-kickback statute exists is to prevent physicians from recommending or performing unnecessary tests or procedures that they might profit from. You can see from the enormous monetary amounts listed here that these physicians were all probably doing huge numbers of unnecessary procedures and maybe even sham procedures. Plus charging an insurance company out of network fees yet charging the patient in-network copays is just total fraud. I cannot believe any lawyer would advise that this was legal under any circumstances.

  3. Pat
    August 25, 2019 at 12:27 pm

    I may have missed it in the article, but were any of the surgeries performed later deemed unnecessary by independent review? Shell corporations and writing off phony bad debt are slimy, and should’ve been apparent to all.

    That said, I have a question: are anti-kickback statues applicable in all industries? I truly don’t know. If an auto dealer owns a separate tire facility, which pays them for referring customers, is that illegal? Or is there merely a requirement that the auto-dealer disclose the arrangement?

    This sort of case will certainly encourage federal agents to presume that more doctors are scumbags, and to pursue thusly. The majority of government interaction with physicians is to threaten, or punish them. A definite disincentive for this line of work, even for honest types.

  4. Natalie Newman, MD
    August 25, 2019 at 6:51 am

    We all need to remind ourselves that lawyers are not always correct. They are human and therefore fallible. Like physicians, if something doesn’t sound right, get a second opinion.

    One glaring red flag(at least to me) is that the physicians “were given a percentage of the money collected based on the number of surgeries they referred to Forrest Park.” Kickbacks. Call them what they are. Even if the other charges were bogus or rules previously legal were changed such that the acts committed are now illegal, it does not negate the crime of accepting kickbacks. Every doctor in this country knows of the anti-Kickback Statute. Now they are going down with the ship. It’s a real shame. It’s not as if skilled physicians grow on trees. All that training and experience can no longer be utilized since they no longer have their licenses. Just terrible.

  5. Richard Carlson
    August 24, 2019 at 2:29 pm

    As the owner of many small businesses over the years, I came to understand (based on good accounting and legal advice) that I should view every choice I made through the lens of “what if I get noticed”? Will it be a small fine, a large fine, jail time, or Feds busting in?

    I often went it with my eyes wide open — little fish like me rarely got more than a slap on the wrist and could negotiate a nice payment plan.

    Seems a bit unfair to suddenly change the rules, even though these guys sound pretty slimy.

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