Former hospital chief to plead guilty in insurance scheme
September 29, 2019
KANSAS CITY, Mo. (AP) — A former hospital chief executive has agreed to plead guilty to participating in a scheme to submit millions of dollars in fraudulent reimbursement claims to insurance companies for a 15-bed hospital in north-central Missouri.
David Lane Byrns, the ex-chief executive of Putnam County Memorial Hospital, was charged Friday with conspiracy to commit health care fraud. An 11-page information alleges Byrns submitted fraudulent reimbursement claims on laboratory tests on behalf of patients who never visited the 15-bed critical care facility in Unionville, about 150 miles (241 kilometers) southwest of Kansas City, The Kansas City Star reported .
Missouri Auditor Nicole Galloway released an audit in 2017 alleging that Putnam County Memorial Hospital received $90 million in questionable insurance payments in less than a year.
The case will be transferred from Kansas City to a federal court in Florida for his plea and sentencing. Byrns' attorney, Justin Johnston, did not return a phone call Monday.
Byrns became chief executive at the hospital in September 2017, through his company, Hospital Partners, which he ran with Jorge Perez of Florida. The two men marketed themselves as businessmen who could help save financially struggling hospitals, particularly in rural communities.
Court records show that Byrns entered into an agreement with a Florida contractor to provide claims processing in return for a 6.5% fee from revenue collected from insurance companies. Another Florida company claimed to operate a clinical lab at Putnam. The information filed against Byrns said the clinical lab company had access to a bank account where insurers would deposit reimbursements.
The federal information said from October 2016 to February 2018, Byrns and others submitted false reimbursement claims for blood and urine tests, bringing in $114 million in payments to the hospital. At least $63 million of that was transferred to the lab operator and Bryns personally received $5.1 million, according to prosecutors.
Perez is the former chief executive of North Kansas City-based EmpowerHMS, a management company tied to several struggling rural hospitals in Kansas, Missouri and elsewhere, including some that were forced to close.
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