Hospital Executive and Three Texas Physicians to Pay Over $880,000 to Settle Kickback Allegations Involving Laboratory Testing
Hospital Executive Agrees to Five-Year Exclusion from Federal Healthcare Programs
December 4, 2023 - Former hospital executive Peggy Borgfeld, of Lexington, Texas, and physicians Linh Nguyen, M.D. and Thuy Nguyen, M.D., of Dallas, and Heriberto Salinas, M.D., of Cleburne, Texas, have agreed to pay a total of $880,199 to resolve False Claims Act allegations involving illegal remuneration in violation of the Anti-Kickback Statute. The parties also have agreed to cooperate with the Justice Department’s investigations of, and litigation against, other participants in the alleged schemes.
“The False Claims Act protects taxpayer-funded programs against those who seek to misuse them for their personal gain,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to enforce the law to protect the integrity of federal healthcare programs, including by pursing arrangements that involve the payment of kickbacks.”
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
The settlements announced today resolve allegations that Drs. Linh Nguyen, Thuy Nguyen and Heriberto Salinas received kickbacks in violation of the Anti-Kickback Statute in return for their laboratory testing referrals.
- Linh Nguyen and Thuy Nguyen. Drs. Linh Nguyen and Thuy Nguyen have agreed to pay $404,813 to resolve two allegations from October 2015 to February 2018. First, the physicians allegedly received thousands of dollars in payments from a purported management service organization (MSO) named Ascend MSO of TX LLC (Ascend) in return for ordering laboratory tests from Little River Healthcare (Little River), a critical access hospital in Rockdale, Texas, and Boston Heart Diagnostics Corporation (Boston Heart), a clinical laboratory in Framingham, Massachusetts. Second, the physicians allegedly received thousands of dollars in payments from an MSO named Geminorium MG LLC in return for ordering laboratory tests from True Health Diagnostics LLC, a clinical laboratory in Frisco, Texas.
- Heriberto Salinas. Dr. Salinas agreed to pay $150,386 to resolve two allegations from December 2015 to May 2017. First, Dr. Salinas allegedly received thousands of dollars in MSO payments from Ascend in return for ordering laboratory tests from Little River. Second, Dr. Salinas allegedly received thousands of dollars in payments from a purported MSO named Herculis MG LLC in return for ordering laboratory tests from Boston Heart.
In addition, the United States announced that Peggy Borgfeld, the former controller, chief financial officer and chief operating officer of Little River, agreed to pay $325,000 plus additional contingent payments to resolve allegations that she caused the submission of false claims to Medicare, Medicaid and TRICARE. Borgfeld allegedly knew that Little River paid commissions to recruiters who used MSOs to pay kickbacks to doctors to induce their laboratory testing referrals to Little River. The settlement resolves allegations that Borgfeld knowingly caused Little River to submit claims to federal healthcare providers for the laboratory tests that the kickback recipients referred to Little River. The settlement also resolves allegations that, despite her knowledge of the MSO kickbacks, Borgfeld signed false certifications in Medicare cost reports regarding Little River’s compliance with the Anti-Kickback Statute. Under the terms of the settlement agreement, Borgfeld agreed to be excluded from participation in federal healthcare programs for five years.
“These settlements demonstrate our firm commitment to holding individuals accountable for their part in this healthcare kickback scheme,” said U.S. Attorney Damien M. Diggs for the Eastern District of Texas. “We will continue to pursue those who cover up improper payment arrangements with pass-through entities, sham marketing contracts and faux investment opportunities to enrich themselves at the expense of the taxpayers, in violation of the Anti-Kickback Statute.”
“Illegal kickback payments not only corrupt the medical decision-making process but also cause harm and financial loss to Medicare and other federally funded healthcare programs,” said Special Agent in Charge Jason E. Meadows of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG works closely with our law enforcement partners to root out and hold accountable those who put profit and personal gain ahead of legitimate medical services.”
“Today’s outcome is a testament to the dedication and determination of the Department of Defense Office of Inspector General (DoD OIG), Defense Criminal Investigative Service (DCIS) and our law enforcement partners to protect our military’s healthcare system, known as TRICARE,” said Special Agent in Charge Michael C. Mentavlos of the DCIS Southwest Field Office. “DCIS will continue to work closely with the Justice Department to hold accountable those that attempt to defraud the TRICARE program, pilfering taxpayer resources and undermining military readiness.”
The settlements were the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Eastern District of Texas, with assistance from HHS-OIG and DCIS. The settlements announced today were handled by Trial Attorneys Christopher Terranova and Gavin Thole in the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorneys James Gillingham and Betty Young for the Eastern District of Texas. The United States has recovered over $36 million relating to conduct involving MSO kickbacks to healthcare providers, which includes recoveries from 43 physicians.
The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS, at 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
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