Palo Pinto General Hospital CEO Pleads Guilty to Multi-Million Dollar Healthcare Fraud Scheme

The former CEO of Palo Pinto General Hospital has pleaded guilty to defrauding three major insurance providers – BlueCross BlueShield of Texas, CIGNA Texas, and United Healthcare – out of millions of dollars, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today.

According to his plea papers, Palo Pinto General Hospital CEO Harris Brooks, along with his co-conspirators, used PPGH’s in-network contracts with large health insurance companies to engage in pass-through billing for laboratory services, a scheme that lasted from September 2017 through June 2018.

Using PPGH’s national provider identification number, Mr. Brooks and his co-conspirators submitted claims to insurance companies for allergy and genetic testing purportedly performed at PPGH, Harris admits.  In reality however, PPGH did not have the equipment on-site to perform the tests for which it submitted claims, and the patients for whom claims were submitted were receiving treatment  at various spas and clinics throughout Texas and elsewhere, not PPGH. The patients did not know about the pass-through charges using PPGH’s insurance contracts.

Over the nine-month period, Brooks and his co-conspirators submitted claims to health insurance providers for laboratory services totaling more than $55 million, the vast majority of which were fraudulent.  As a result of these claims, the insurance companies paid PPGH more than $9 million.

The purpose of the scheme was to receive higher rates of reimbursement from the insurance companies, Harris said.

According to his plea agreement, Brooks faces up to five years in prison and will be required to pay restitution to those he defrauded.

The Federal Bureau of Investigation conducted the investigation; Assistant U.S. Attorney Megan Fahey prosecuted the case.