Former Fulton, Sweet Springs hospital executive indicted for $1.4 billion in fraud

Posted on 30 June 2020 at 8:17pm
Story image: Former Fulton, Sweet Springs hospital executive indicted for $1.4 billion in fraud

COLUMBIA - A former Miami-based health care executive who managed hospitals in Fulton and Sweet Springs faces 23 federal counts, including health care fraud and money laundering.

Jorge Perez was the CEO of EmpowerHMS, which managed the Fulton Medical Center and I-70 Community Hospital in Sweet Springs.

"We have something that we call our secret sauce and basically that's nothing more than thinking outside the box and understanding what the community needs and talking with the physicians of the hospital," Perez said when Empower took over the hospital in 2017.

As for that secret sauce, the indictment alleges Perez and nine others used hospitals as "billing shells" to submit $1.4 billion in fraudulent claims for laboratory testing.

Prosecutors say Perez's company would take over rural hospitals in financial trouble and bill private insurance companies for blood tests done at facilities where they also controlled the billing and could charge substantially more than a third-party lab.

Investigators found many of the tests weren't medically necessary. The company allegedly paid kickbacks to recruiters and health care providers in connection with the testing.

“This was allegedly a massive, multi-state scheme to use small, rural hospitals as a hub for millions of dollars in fraudulent billings of private insurers,” said Assistant Attorney General Brian Benczkowski.

Perez and a second defendant collected $46 million from the scheme that went, in part, towards eight vehicles, including a 2017 Range Rover, Ferrari, and Mercedes-Benz while many hospitals fell deep into debt, according to the indictment.

The I-70 Community Hospital in Sweet Springs closed in February 2019 after insurance providers refused to pay for procedures there.

KOMU found in November the time an ambulance takes from picking up a patient to being back in service has doubled to nearly two hours since the closure.

Saline County Health Department Administrator Tara Brewer told Kaiser Health News she was surprised by the indictment after hearing no updates for over a year. While it brings closure to the community, she said the charges do not reopen the hospital in the county that has the highest per capita COVID-19 rates in Missouri.

“What he did to us will linger on for a long time,” Brewer said.

The Fulton Medical Center was bought by a new management system in December and saved from closure. They owed the IRS $3 million at the time of the sale, in addition to $500,000 in settlements to contractors, $4.3 million dollar mortgage, and a $1.5 million line of credit.

Fulton's hospital was one of the few to be turned-around after Empower's management. A healthcare watchdog report attributes half of the 2019 U.S. hospital bankruptcies to the company.