NOVEMBER 20, 2001—A San Antonio businessman is facing a federal indictment on 13 counts of mail fraud for submitting allegedly false patient bills to the U.S. Department of Labor, VIA Metropolitan, and other private insurance carriers. Authorities are seeking repayment of $218,640 and the forfeiture of a Chevrolet Corvette.
Charles Anthony Blevins, a certified occupational therapist assistant, was the owner of Self Insured Consultants and Employee Management and Industrial Athletics in San Antonio. The clinics treated patients with job-related injuries who were covered by workers’ comp insurance. An investigation conducted by the FBI, Texas Mutual Insurance Company (formerly the Texas Workers’ Compensation Insurance Fund), the Department of Labor, and the Texas Workers’ Compensation Commission uncovered evidence that Blevins’ clinics allegedly were billing for more hours than they actually spent treating patients.
According to the indictment, Mondays through Thursdays, Blevins treated some patients for a maximum of six hours, but he billed the insurance carriers for eight hours of treatment. On Fridays, also known as “Fun Fridays” according to the indictment, Blevins allegedly treated some patients for a maximum of four hours. He then took them on outings to such places as Hooters or Malibu Grand Prix. Again, Blevins billed the insurance carriers for eight hours of treatment.
The indictment further alleges that Blevins submitted false patient referral fees for physicians and that he billed for one-on-one patient contact with a physician, licensed physical therapist, or a licensed occupational therapist when no such contact occurred.
Note: A grand jury indictment is a formal accusation--not a conviction--of criminal conduct.
NOVEMBER 1, 2001—Texas Mutual Insurance Company has accused four pharmacy chains and two third-party billing companies of overcharging the company by more than $1 million for workers’ compensation patients’ prescriptions in a lawsuit filed today.
The suit names as defendants: Eckerd, Wal-Mart, H-E-B and Walgreen pharmacies, as well as third-party billing companies Third Party Solutions Inc. and Apollo Enterprises Inc. The defendants violated the law by charging Texas Mutual Insurance Company significantly more for workers’ compensation covered prescription drugs than they would for the same prescription paid for by an individual not covered by workers' compensation, according to the lawsuit.
According to court documents, Third Party Solutions and Apollo Enterprises regularly submitted inflated bills, which grossly exceeded their client pharmacies’ usual and customary charge. In the suit, Texas Mutual Insurance Company alleges that Third Party Solutions posted an ad on its website promising a 22-25 percent profit margin for regular prescriptions and a 32-35 percent profit margin for workers’ compensation prescriptions and that Apollo Enterprises advertised that its pharmacy clients could enjoy “workers’ compensation gross profit margins in excess of 35 percent.”
The suit indicates that Texas MutualSM investigators uncovered a pattern and practice by Eckerd Drug and Apollo Enterprises of routinely inflating their workers’ compensation bills up to 2-1/2 times over Eckerd’s usual and customary charge. The suit charges that Eckerd deliberately intended to bill Texas Mutual Insurance Company the inflated amounts, despite knowing that those amounts exceeded its usual and customary charges.
The suit describes an initial investigation into Eckerd’s and Apollo Enterprises’ billing practices showed that both companies allegedly overcharged Texas Mutual Insurance Company by approximately $11.48 per prescription, on average, and goes on to tell of the investigation expanding to include evidence of other pharmacies deliberately inflating their charges for workers’ compensation prescriptions. In one example laid out in the court filings, H-E-B (through its association with Third Party Solutions) raised the cost of one injured worker’s prescriptions from $25.14 to $114.44—an increase of more than 550 percent—for the same worker at the same store for the same quantity and strength of pharmaceutical.
In another example given in the suit, Texas MutualSM investigators reported similar practices at Walgreen, in which it billed Texas Mutual Insurance Company $22.49 for 20 tablets of 350mg Carisoprodol, but when an individual paid for the identical prescription out of her own pocket, Walgreen only charged its usual and customary fee of $14.69—approximately two-thirds of what it would have charged Texas Mutual Insurance Company
In Liberty, a Wal-Mart pharmacy charged an individual customer $30.68 for 60 tablets of 350 mg Carisoprodol, but when an injured worker covered by a Texas MutualSM policy received the exact same prescription, Wal-Mart submitted a bill for $56.88, according to the suit.
In its suit, Texas Mutual Insurance Company is asking for restitution for overpayments in excess of $1 million, plus interest, attorney fees, and other damages and penalties as allowed by law. Additionally, Texas Mutual Insurance Company seeks a permanent injunction restraining the pharmacies and their billing services from submitting claims for reimbursement that exceed the pharmacies’ usual and customary charge.