Days after landing a partial guilty verdict in disgraced Theranos CEO Elizabeth Holmes’ federal fraud trial, the U.S. Department of Justice’s (DOJ's) crusade against healthcare scams rages on.
The U.S. Attorney’s Office for the Eastern District of North Carolina on Wednesday indicted a Raleigh-based ear, nose and throat doctor for what prosecutors say was a yearslong scheme to falsely rake in millions of dollars from Medicare payments for balloon sinuplasty procedures.
According to the indictment (PDF), otolaryngologist Anita Jackson, M.D., allegedly billed the government for more than $46 million between 2014 and 2018, netting more than $5.4 million for her practice—Greater Carolina Ear, Nose and Throat, or GCENT—in the process. It claims GCENT charged Medicare for more than 1,200 procedures for 700 patients.
That made Jackson the highest-paid provider of balloon sinuplasty, an endoscopic procedure to treat clogged sinuses, in the U.S. for several portions of that time—outranking, rather suspiciously, the earnings of ENT practices located in major metro areas.
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The indictment details a laundry list of crimes Jackson allegedly committed to defraud Medicare of millions, including adulteration of medical devices, paying illegal remunerations, making and using materially false healthcare documents, mail fraud and conspiracy.
The first charge stems from claims that GCENT repeatedly reused sinuplasty balloons countless times, even though the devices cleared by the FDA are marketed as single-use only, since they come into contact with a variety of body fluids when inserted into the sinuses.
Jackson allegedly purchased only about 30 of the balloons between 2014 and 2018, then sterilized and reused them for her hundreds of patients, a practice that the DOJ says brought in “hundreds of thousands of dollars in profits.”
The court also said Jackson regularly failed to charge her patients the full amount required by Medicare for the procedures, which GCENT marketed as a “Sinus Spa.” Balloon sinuplasty typically costs patients hundreds to thousands of dollars, but Jackson would allegedly often charge only a $50 copay or nothing at all.
“Jackson profited from this scheme because it enabled her to reap millions in balloon sinuplasty payments from Medicare which might not otherwise have been incurred had the true patient obligations been disclosed,” according to the indictment, which noted that the government paid nearly all of the balloon sinuplasty charges for Medicare-only patients, rather than the required 80%.
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Prosecutors also took issue with Jackson’s medical record-keeping practices—or lack thereof. They allege that those excessive Medicare billings were made without being backed by comprehensive reports of office visits and proof of each patient’s medical need for the sinuplasty services. Reports were either completely nonexistent or, if created, were missing necessary signatures, dates and medical details.
Instead, GCENT allegedly billed Medicare using a repeatedly cloned template record rather than true, patient-specific electronic health records.
Additionally, when Medicare did attempt to conduct a post-payment audit of GCENT’s services, per the indictment, the practice scrambled to create fake medical records to support the procedures it had billed for.
“When Medicare attempted to conduct audits of Jackson’s medical records, Jackson and her subordinates engaged in a scheme to fabricate, backdate and forge records to deceive the auditors,” prosecutors wrote. “By deceiving Medicare auditors with fraudulent records, Jackson attempted to prevent, and in some instances did prevent, auditors from recouping substantial Medicare proceeds from Jackson.”
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In total, Jackson is facing 20 federal charges. The maximum prison terms range from a mandatory two-year sentence for aggravated identity theft to 20 years for mail fraud. If found guilty, she could also be on the line for a fine of more than $250,000.