SANTA ANA (CBS) — A radiologist and three of his employees in a Buena Park medical office used billing fraud to fuel a $17 million workers’ compensation insurance fraud scheme, according to a grand jury indictment unsealed on Monday.

Dr. Sim Carlisle Hoffman, 59, of Newport Beach, Dr. Thomas Michael Heric, 74, of Malibu, Beverly Jane Mitchell, 60, of Westlake Village, and Louis Umberto Santillan, 44, of Chino Hills are accused of over-billing for unnecessary or never-performed procedures, said Orange County District Attorney Tony Rackauckas.

Hoffman, a radiologist who owns Advanced Professional Imaging, Advanced Management Services and Better Sleeping Medical Center in Buena Park, faces 883 counts of insurance fraud and one count of aiding and abetting the unauthorized practice of medicine — all felonies.

Mitchell, the administrator in charge of insurance billing for Hoffman’s businesses, faces the same charges as Hoffman.

Heric, a neurologist, worked for Hoffman at the Better Sleeping Medical Center. He is charged with 296 counts of insurance fraud and one count of aiding and abetting the unauthorized practice of medicine.

Santillan, who did billing collections for Advanced Professional Imaging, is charged with 141 felony counts of insurance fraud.

“The mastermind of this medical mill is Dr. Sim Hoffman,” Rackauckas alleged.

“Hoffman is a radiologist who owns the sleep and nerve testing centers. He is charged for using patients as props in order to bilk the system by overbilling the insurance companies,” he said. “Dr. Hoffman was disciplined in 2001 by the Medical Board of California for similar unethical medical practices.”

Hoffman had Heric “study” patients and write reports on their status, Rackauckas said.

“Heric’s so-called `studying’ of patients involved using a made-up formula entirely of his own creation that is not recognized in any medical community,” Rackauckas said.

The reports were of a “cookie-cutter” variety, and none of the patients were given any treatment for their disabilities, the county’s top prosecutor said.

Heric’s license was suspended for 60 days in 2008 for a felony Medicare and Medi-Cal fraud conviction, Rackauckas said.

Hoffman hired Mitchell after he was disciplined in 2001, Rackauckas said.

Santillan, who has no college degree or certification, is accused of collecting more than $800,000 in commissions from fraudulently received insurance payments over two years, Rackauckas said.

At the nerve-testing center, patients underwent painful testing that cost $330 instead of a much-less invasive exam that cost $35, Rackauckas alleged. Only two doctors in California are qualified to perform the more expensive and invasive test, he added.

“Hoffman is not one of those two doctors,” the prosecutor said, “and Hoffman didn’t just bill for one Single Fiber EMG per patient. According to his bills, the patients went through this painful procedure over 20 times each.”

A 56-year-old woman who hurt her wrist and ankle when she tripped over some boxes at work was referred to Hoffman, who had her undergo a sleep study, MRI and nerve testing, Rackauckas said.

The woman “was never told the results of her diagnostic tests,” Rackauckas said. “Months later, she was informed by her attorney that her claim had been denied by the insurance company.”

Hoffman has still pursued payment from the unidentified woman through liens amounting to more than $15,000, Rackauckas said.

“These patients were used as pawns in Hoffman’s piggy bank,” Rackauckas alleged.

The four “created a $17 million medical mill at the expense of over 1,200 patients and the workers’ compensation insurance system,” Rackauckas charged.

State Insurance Commissioner Dave Jones said such fraud drives up insurance premiums for legitimate businesses.

Zenith Insurance Co. brought the alleged fraud to light with a complaint to the insurance commissioner’s office in July 2008, Jones said.

“It’s outrageous, and the prosecution announced today will send a clear signal to medical providers,” Jones said. “We’re taking it seriously as we should because it’s a drag on our economy.”

The four were indicted May 11, but the grand jury indictments were not unsealed until Monday.

(©2011 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

Comments (4)
  1. deen says:

    First collect as much as you can from these low lifes and throw them in jail for 25 years…

  2. Patrick McDonald says:

    At this point, we do not know if these particular MDs are Guilty of anything. Time, of course, will tell.

    But as one who investigates physician shenanigans for a living, I can fairly report that if they are indeed convicted, they will join a medical miscreant fraternity of jaw-dropping proportions.

    For those unaware, there exists a rather secretive set of nondescript offices on a side-street in Washington DC, known as the Nat’l Practitioner Data Bank. Their primary function is to collect & discreetly disperse names and medical license numbers of an astonishing number of doctors who just can’t seem to stay out of trouble. A fair percentage of their files are referred to as “Dangerous” or “Questionable” by the Health Research Group.

    Any guesses how many physician names make up the NPDB files?

    Well, they had 237,000, at last report. You may want to pause here, and take another peek at all those zeros.

    The reality is, almost exactly 50 doctors per WEEK are found guilty of Felony-level deeds. That adds up to almost exactly 2,500 every year. We happen to have 11,210 in our files, just since 2004. Their crimes?

    1. Medical Fraud
    2. Falsification of Records
    3. Prescription Drug Pushing
    4. Unnecessary Procedures/Surgeries
    5. Patient Assault
    6. Child Sexual Abuse
    7. Secretly Filming their nude patients or nursing staff
    8. Fake Botox injections
    9. Homicide
    10. Attempted Murder
    11. Conspiracy to commit Murder

    The ugly reality is three-fold:

    1. NO profession in society generates more crime; inflicts more unnecessary suffering & death; nor evades more appropriate discipline, than the errant doctor population.

    2. The overwhelming number of physicians, nurses & hospital administrators have never reported their unethical, incompetent or criminal peers, even though 70% of them know at least one.

    3. You didn’t hear a single peep of any of this, during the incessant 2-year yammering called ‘Health Care Debate.’

    “Finest health care system in the world?”

    We may want to stop the ridiculous flag-waving for a while.

  3. Political Watchdog says:

    What about comments about insurance companies and political donations? Will Zenith make available the corporate jet to Tony Rackauckas as was purportedly done with Gil Garcetti? Or will another $150,000,000.00 do the job? Insurance funded individuals with political ambitions may result in misguided indictments and a big waste of public resources! If this is the case, shame on the insurance giants and shame on the misguided politicians!

  4. Insurance underwriter salary says:

    Did you know that you can put your declare in jeopardy associated with not getting compensated if you do not inform the insurance policy business the appropriate way discover ways to still do it as well as guard yourself !Ubezpieczenia Anglia

Leave a Reply

Please log in using one of these methods to post your comment:

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Watch & Listen LIVE