Husband and Wife Physicians Convicted of 10-Year Conspiracy to Commit Health Care Fraud

Doctors Arun and Kiran Sharma Plead Guilty

April 26, 2010 - HOUSTON—Dr. Arun Sharma, 56, and Dr. Kiran Sharma, 54, both of Kemah, Texas, have been convicted of conspiring to commit health care fraud over a 10-year-period in the Southern District of Texas, United States Attorney José Angel Moreno announced today. The doctors were set to begin trial today when they each instead opted to plead guilty to one count of conspiracy and one count of health care fraud.

In entering their pleas today before United States District Judge David Hittner, Arun Sharma (Dr. A) and Kiran Sharma (Dr. K) admitted that from Jan. 1, 1998, through June 10, 2009, they fraudulently billed Medicare, Medicaid and various private health care providers for medical procedures that were not performed. Specifically, during the time period of the conspiracy, the defendants owned and operated multiple medical clinics operating under the name Allergy, Asthma, Arthritis Pain Center, with two principle locations in Baytown and Webster, Texas, (the clinics). While some of patients at the clinics were referred by other medical doctors, approximately 50% of the patients came to the clinics through word of mouth. Specifically, Dr. A Sharma was known as an easy touch for prescribing Hydrocodone, Soma and Xanax. As time went on, Dr. A began prescribing stronger narcotics such as oxycodone, methadone and fetynal patches.

In addition to the prescription of narcotics, a large part of the practice conducted at the clinics was to provide patients with injections of lidocaine combined with steroids which at times provided temporary relief of various joint and muscle pain. Although most of the injections given to the patients were, at best, trigger point injections, they were billed to the insurance companies as facet joint injections, paravertebral injections, sacroiliac nerve injections, sciatic nerve injections and various nerve block injections.

The pain management practice at the clinics grew quickly during the time period of the conspiracy. Specifically, Dr. A and Dr. K went from seeing an average of 50-60 patients per day in 1998 to 97 per day in 2009 with a high of 109 per day in 2005. From 1998 through 2002, Dr. K saw pain patients at the clinics in addition to her own allergy patients. Specifically, Dr. K, who maintained a modest allergy practice, would sign patient procedure forms and superbills, falsely indicating that she had administered facet joint injections or other paravertebral injections when in reality she would, at best, have given trigger point injections. She would also prescribe narcotics when she saw pain management patients.

Nearly every patient was prescribed one or more controlled substances and put on a regimen of shots every two weeks. The patients were required to sign the progress and procedure notes in their patient chart to prove they were at the clinic and received the shots. Dr. A tried to convince all patients to have shots at every visit, but many of the patients did not want the shots every two weeks. For those patients who ultimately refused the shots, Dr. A regularly required the patients to sign the progress and procedure notes even though they received only a prescription for controlled substances and did not receive any injections. By the beginning of 2000, Dr. A was having certain patients sign blank procedure/progress notes and then using those forms to generate a superbill in order to bill the insurance companies for injection procedures on days when the patient was not in the clinic.

Dr. K hired several foreign medical graduates (FMGs) over the course of the conspiracy to assist in the movement of patients through the clinics. Several of the FMGs helped add fictitious patient examination information to the blank progress/procedure notes after Dr. A had added non-existent medical procedures to the blank forms so that insurance companies could be billed as if the person had been in the clinic when in reality they had not. Dr. K witnessed the FMGs creating the fictitious patient progress/procedure notes and knew that their ultimate purpose was to bill the insurance companies for procedures that never occurred. Demonstrating the implausibility of the volume of patients who allegedly received injections is the fact that the defendants' own records purport to show that more than 100 patients purportedly received injections on 708 different days during the conspiracy. Further, the defendants’ billings showed that as many as 279 patients allegedly received injections on Jan. 6, 2005.

In addition to pleading to the criminal charges, the defendants voluntarily forfeited tens of millions of dollars in assets previously seized – to include their home in Kemah, Texas, numerous parcels of real property, more than $700,000 in cash that was found during a search of their home, more than $800,000 in cash found during a search of their two safe deposit boxes and a number of investment accounts funded with the fraudulent proceeds. After taking the defendants’ guilty pleas, Judge Hitter took both defendants into custody pending sentencing on July 27, 2010, at 9 a.m. At sentencing, per the terms of her plea agreement, Kiran Sharma will be sentenced to eight years imprisonment, while Arun Sharma faces up to 15 years in prison.

The criminal charges are the result of a joint investigation conducted by agents of the FBI, the Department of Health and Human Services-Office of Inspector General, the Medicare Fraud Control Unit of the Texas Attorney General's Office, the Office of Personnel Management-Office of Inspector General, the Railroad Retirement Board-Office of Inspector General and the Drug Enforcement Administration. The case is being prosecuted by Assistant United States Attorneys Al Balboni and Jason Varnado.