Hudson Valley Doctor Admits to ‘Sophisticated’ Illegal Activity
A Hudson Valley doctor is heading to prison for a "sophisticated, widespread, and callous scheme that put greed and profits ahead of patients."
James Spina, 63, of Middletown was sentenced on Tuesday to 9 years in prison for his participation in a widespread health care fraud scheme through the fraudulent operation of Dolson Avenue Medical, a multi-disciplinary medical clinic located in Middletown. Spina previously pleaded guilty to one count of conspiracy to commit healthcare fraud.
“James Spina led a sophisticated, widespread, and callous scheme that put greed and profits ahead of patients and their well-being. In doing so, he betrayed his professional obligations and bilked insurance companies and Medicare out of millions of dollars," U.S. Attorney Audrey Strauss said. "Thanks to the coordinated efforts of federal and state investigative agencies, Spina will now serve a lengthy sentence in federal prison.”
According to the indictment, other court filings, and statements made during court proceedings:
- From 2011 through September 2017, Dolson Avenue Medical, located at 201 Dolson Avenue in Middletown, was a registered medical service corporation in New York State that purported to provide a variety of pain management and rehabilitation services, including physical medicine and rehabilitation, chiropractic services, physical therapy, diagnostic testing, and acupuncture.
- In addition to Dolson Avenue Medical, at least eight other corporations, including four other medical corporations, billed Medicare and other health insurance providers from 201 Dolson Avenue. On paper, Dolson Avenue Medical and the other businesses appeared to be separate entities owned by multiple different qualified people.
- But in reality, Spina, who is a doctor of chiropractic – not a medical doctor – along with his co-defendant, were the true owners and operators of the different medical service corporations.
- Spina and his co-conspirators made all corporate decisions for DAM and the associated businesses. In particular, Spina ran the day-to-day operations of the businesses. Spina and his co-conspirators controlled payroll, the hiring and firing of employees, corporate expenses such as employee compensation and rent, and billing to insurance providers.
- Spina also went to great lengths to conceal his control and ownership of all the businesses. In particular, he and one of his co-conspirators recruited medical doctors and other professionals to serve as the nominee owners of the businesses.
- Spina further concealed his ownership by transferring revenues of these companies into other companies that he and a codefendant owned. To further disguise these transfers, he drafted fake lease and marketing agreements between DAM and the Associated Businesses and purported real estate and marketing companies he owned, and referred to the payments as “rent” or “marketing fees.” He and his co-conspirators also used phony and non-existent addresses for the corporations so that it would appear that DAM and the Associated Businesses were operating out of separate locations.
- In operating the multiple fraudulent businesses, Spina and his co-conspirators routinely showed little, if any, regard for which medical services or treatments were medically necessary, or even whether the services were actually provided to patients, and instead operated DAM and billed insurance providers to maximize DAM’s reimbursements and, ultimately, their own profits.
- In particular, Spina and his co-conspirators: (a) submitted and caused to be submitted claims to Insurance Providers for medically unnecessary services and procedures; (b) submitted and caused to be submitted claims to Insurance Providers for medical services that were not rendered; (c) double-billed, i.e., submitted and caused to be submitted multiple claims for the same service to two different Insurance Providers; (d) altered and fabricated medical records; and (e) obstructed and impeded audits by Medicare and other Insurance Providers to conceal their fraud.
- As part of the fraudulent scheme, one of the doctors introduced a lucrative procedure called a facet injection. Because the facet joints to which the injections are applied are near the spinal cord, such procedures are high-risk, with a small margin for error. The doctor had no formal training in the procedure and taught himself by shadowing other doctors and watching YouTube videos.
- Spina was intimately involved with all billing-related aspects of the facet injections and continued to encourage their use even after several patients suffered serious, adverse events, and one patient died of complications following a facet injection.
In addition to the prison term, Spina was sentenced to three years of supervised release. The Court also ordered Spina to pay $9,760,555.20 in restitution and to forfeit $9,105,741.61.