From The Tribune staff reports
TUSCALOOSA – Two Alabama men, one from Gadsden and one from Huntsville, pleaded guilty yesterday to charges in related cases involving multi-million-dollar health care fraud conspiracies, announced U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Acting Special Agent in Charge Felix A. Rivera-Esparra, and U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Tamala E. Miles.
James Ewing Ray, 51, of Gadsden, and John Hornbuckle, 52, of Huntsville, each pleaded guilty before Chief United District Court Judge L. Scott Coogler to one count of conspiracy to commit health care fraud. Hornbuckle also pleaded guilty to one count of conspiracy to receive kickbacks.
Ray owned Integrity Medical LLC, a company through which he marketed health care items and services to medical providers.
According to his plea agreement, between 2012 and 2018, Ray conspired with others to pay and receive kickbacks to induce medical providers to issue medically unnecessary prescriptions and order medically unnecessary goods and services, which were then billed to Medicare and other health insurers.
One of those services was electro-diagnostic testing provided by a Huntsville-based electro-diagnostic testing company called QBR, or Diagnostic Referral Community, which at the time was owned by Hornebuckle. Ray received per-patient payments from QBR for inducing medical providers to order tests from QBR.
According to the plea agreement in Hornbuckle’s case, QBR billed insurers millions of dollars for electro-diagnostic testing that its technicians performed, regardless of whether there was a medical need for them. Hornbuckle caused QBR to pay medical providers a per-patient fee for the tests they ordered from QBR that were reimbursed by insurers, including Medicare and other government health care programs. The payments were disguised as hourly payments for the provider’s time and the time of the provider’s staff, but the provider was actually paid a fee per patient who received a test.
Ray and Hornbuckle’s cases are related to another case that resulted in convictions earlier this year. After a multi-week trial in February, a jury convicted a Tennessee doctor and his wife of kickback and health care fraud charges (among others). Dr. Mark Murphy, 65, and his wife Jennifer Murphy, 65, both of Lewisburg, Tennessee, owned and operated North Alabama Pain Services, which closed its Decatur and Madison offices in early 2017.
According to court documents and evidence presented at trial, the Murphys took kickbacks from QBR of more than a million dollars. In return, Dr. Murphy ordered electro-diagnostic tests from QBR for his patients, regardless of whether there was a medical need for those tests.
Before the Murphys went to trial, a co-defendant, Brian Bowman, 41, of Attalla, pleaded guilty to health care fraud conspiracy. According to Bowman’s plea agreement, Bowman marketed QBR’s electro-diagnostic testing to medical providers and was paid a fee for each test they ordered. Bowman received nearly a million dollars in fees from QBR. Dr. Murphy, Jennifer Murphy, and Brian Bowman are all awaiting sentencing.
The maximum penalty for kickback conspiracy is five years in prison. The maximum penalty for health care fraud conspiracy is 10 years in prison.
Sentencing dates for Ray and Hornbuckle have not yet been scheduled.
The FBI and HHS-OIG investigated the case, and Assistant U.S. Attorneys J.B. Ward and Don Long are prosecuting it.