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Alabama Gross sales Rep and Clinic Proprietor Sentenced in $28M Billing Fraud Scheme



A medical gross sales consultant and a ache clinic proprietor in Alabama have been sentenced to years in jail for his or her roles in a long-running, $28 million fraud scheme that concerned a compounding pharmacy, unneeded nerve assessments and a former employees’ compensation treating physician.

James E. Ray, 53, of Gadsden, Alabama, final week was sentenced to 40 months for conspiracy to commit well being care fraud. He additionally should forfeit some $850,000 and try and pay greater than $5 million in restitution, in keeping with court docket information and the U.S. Legal professional’s Workplace for Northern Alabama.


U.S. District Choose Scott Coogler additionally sentenced David Shehi, 43, of Rainbow Metropolis, to twenty-eight months in federal jail and ordered him to pay restitution. Shehi owned Etowah Ache, a clinic in Rainbow Metropolis. He had accepted kickback funds in alternate for ordering pointless nerve-conduction testing, prosecutors mentioned.

Additionally named in Ray’s 2022 indictment was John Hornbuckle, president of QBR Inc., which supplied the electro-diagnostic testing, and Dr. Eric Beck, of Huntsville. Beck, who beforehand had handled injured employees in his observe, owned Valley Heart for Nerve Research and Rehabilitation. Beck pleaded responsible in 2022 and was sentenced to fifteen months, plus restitution. Hornbuckle was sentenced in 2023 to 6 years in jail, federal court docket information present.


Prosecutors mentioned the scheme ran from 2012 by way of 2018. Ray was paid kickbacks to lure medical suppliers into ordering unneeded meds and providers, together with costly compounded medication, sturdy medical tools, and the nerve assessments from QBR. Ray additionally paid kickbacks to the suppliers, court docket papers contend.

The medical doctors billed Medicare, Medicaid, TriCare, BlueCross BlueShield and different insurers as a lot as $28 million through the years, in keeping with court docket information and information experiences.


“Shehi additionally prompted his observe to routinely invoice medical health insurance applications for affected person workplace visits utilizing the code that will generate the very best reimbursement—though that code was not applicable and Shehi was warned that billing on this manner was not allowed,” the U.S. Legal professional’s Workplace mentioned in a press launch final week.

Ray’s indictment didn’t point out if employees’ compensation insurance coverage carriers had been billed. However compounded medication and medical tools have lengthy been a element of alleged employees’ comp fraud instances. Insurers have for years complained in regards to the issue in controlling the price of compounded drugs.


Ray had owned Integrity Medical, by way of which he marketed well being services and products, the indictment reveals.

Photograph: nerve conduction testing.




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