Former Georgia insurance commissioner sentenced to prison for $3M fraud scheme
The former insurance commissioner of Georgia is heading to prison for an unnecessary lab testing scheme that involved $3 million worth of insurance claims.
John Oxendine has been sentenced to three and a half years after being convicted of conspiracy to commit healthcare fraud. The U.S. Department of Justice (DOJ) said he conspired with a physician, Jeffrey Gallups, MD, to submit fraudulent claims for unnecessary lab tests. The duo netted $260,000 in kickbacks.
Physicians in Gallups’ practice were pressured to order tests from Next Health—a medical lab in Texas—and those same physicians were also given illegal kickbacks as compensation, the DOJ said.
Next Health went on to submit $3 million in claims to Medicare, insurance companies and patients. Many of the tests were totally unnecessary. According to the DOJ, the lab was complicit in the scheme, offering 50 percent of the net profit for eligible specimens submitted by Gallups.
Oxendine attempted to cover up the scheme by instructing Gallups to lie to federal agents during their investigation. Oxendine used part of the kickback money to pay for Gallups’ legal fees after he faced charges, the DOJ added.
Oxendine also allegedly used part of the kickback profits to make tax-deductible charitable donations.
“Oxendine abused his position as the former Georgia Insurance Commissioner by undermining the integrity of the state’s healthcare system when he conspired with a physician to order hundreds of unnecessary and costly lab tests,” U.S. Attorney Ryan K. Buchanan said in a statement. “This case demonstrates our office’s commitment to work with our law enforcement partners to hold individuals accountable who prioritize personal greed at the expense of the public’s trust.”
Oxendine is 62 years old. After his three and a half year term behind bars, he will be subjected to three years of supervised release. He was also ordered to pay $760,175.34 in restitution and a $25,000 fine.
Gallups is currently serving his 33 month prison sentence after being convicted in a separate criminal trial.
The conspiracy was investigated by cooperating agents from the Federal Bureau of Investigation and the Office of Inspector General’s Defense Criminal Investigative Service.
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