Kentucky clinic CEO convicted in $16M Medicare fraud, drug trafficking scheme

A husband and wife team at a Hazard, Ky.-based medical clinic have been found guilty of more than 180 charges, ranging from illegal drug distribution to healthcare fraud.

According to the Lexington Herald-Leader, evidence was presented at trial showing Lesa Chaney, CEO of the now-closed Ace Clinique of Medicine, and her husband, James “Ace” Chaney, MD, made millions by illegally prescribing controlled substances and improperly billing Medicare and Medicaid for more than $15 million between March 2006 and October 2014, when Chaney’s license was suspended.

“The defendants in this case combined a massive illegal drug distribution scheme with a massive healthcare fraud scheme,” Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky said in a statement.

Among the examples of the Chaneys’ fraud presented in court was evidence of James Chaney pre-signing prescriptions for controlled substances to be completed by clinic staff while he was out of the office or on vacation. Prosecutors said James Chaney knowingly prescribed the drugs to individuals who were selling or abusing the drugs and other narcotics.

As part of the healthcare fraud scheme, James Chaney would falsify drug screening results, then submit the results for reimbursement. The U.S. Attorney’s office said Ace Clinique staff billed Medicare for more urine drug screening tests than any other provider in Kentucky between 2009 and 2011.

The money earned from the scheme was allegedly used on luxury items for the Chaneys, including a private plane.

The couple was cleared of some charges, including more than 30 counts related to alleged billing fraud related to MRI examinations.

The Chaneys are scheduled to be sentenced in August, with the most serious counts carrying maximum sentences of 20 years. However, their attorney, Elizabeth S. Hughes, told the Leader the couple plans to appeal the ruling. 

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John Gregory, Senior Writer

John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.

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