October 19, 2021

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Louisiana Doctor Pleads Responsible to Workers’ Comp Fraud Conspiracy | USAO-WDAR

FAYETTEVILLE, Ark.—A Lake Charles, La., medical professional pleaded guilty today to one count of conspiracy to dedicate mail fraud, wire fraud, health treatment fraud, fraud to obtain federal employees’ payment, and illegal remunerations (using kickbacks), in relationship with a plan to defraud the U.S. federal government and non-public insurance policy corporations by more than-billing for unwanted remedies offered to workers’ compensation individuals. 

U.S. District Judge Timothy L. Brooks presided around the plea hearing, in which Robert Dale Bernauer, Sr., 74, waived indictment by a grand jury and pleaded responsible to a felony information and facts charging him with conspiracy to violate five various federal statutes. According to court docket documents, Bernauer, an orthopedic surgeon and clinician who practiced in Louisiana, built far more than $1,000,000 off of the plan, which ran from 2011 till 2017 and defrauded equally federal and private workers’ compensation insurers.

Court docket paperwork allege that the simple premise of the plan was that individuals associated with an Arkansas company recruited Bernauer to dispense pain creams and patches to his workers’ payment sufferers by featuring him a 50 % split of the earnings gathered from effectively billing insurers. The organization billed insurers at markups of any where from 1,500 to 2,000 percent—in other phrases, 150 to 200 instances what the drugs actually cost. The unnamed organization acted as the billing agent for Bernauer, managing all of the paperwork and submitting the allegedly fraudulent claims to both equally the U.S. Division of Labor, Business office of Workers’ Compensation Programs, which handles all federal personnel, and to non-public insurers as very well.

Bernauer admitted that both of those he and his co-conspirators realized he did not have a license to dispense prescription drugs from his clinic, which was necessary below Louisiana law, but proceeded anyway to indication two contracts beneath which he agreed to get topical remedies from the Arkansas company at established premiums, and dispense them exclusively to his workers’ compensation clients.  In flip, the contracts offered that Bernauer and the company would each individual get 50 % of all quantities successfully gathered from insurers.

Even though these earnings-splitting arrangements violated both federal and Louisiana legal guidelines, in pleading responsible Bernauer admitted he joined the scheme realizing it was, in his words, “too great to be genuine.” Bernauer even further admitted he deliberately blinded himself to the illegality of the enterprise arrangement, inspite of all the “red flags” he understood to be current. Bernauer’s plea arrangement states that though not supplying any excuses for his conduct, he joined in the conspiracy mainly because he needed the funds, and continued to take part owing to costs linked with his wife’s last ailment.

Court docket files indicate that Bernauer was not the only medical professional included in this plan, and the whole monetary harm to federal and private workers’ compensation insurers is not listed. Nevertheless, Bernauer by yourself accounted for a loss of somewhere around $2,050,546, of which $664,176.50 was endured by the federal businesses whose employees ended up Bernauer’s individuals.

“The Section of Justice and this U.S. Attorney’s Office are committed to combatting wellbeing care fraud and holding accountable the perpetrators of strategies like the just one alleged here,” stated David Clay Fowlkes, Performing U.S. Legal professional for the Western District of Arkansas.

“Today’s guilty plea highlights the commitment of the Division of Defense Inspector Common, Defense Felony Investigative Company, and our law enforcement partners to guard the integrity of the workers’ payment system that serves our federal workforce,” explained Distinctive Agent in Cost Michael Mentavlos of the Protection Prison Investigative Service Southwest Discipline Office. “Physicians, marketers and billing organizations who attempt to choose edge of the system by having to pay and obtaining kickbacks for prescribing avoidable prescription drugs expose our workforce to likely actual physical damage and squander beneficial taxpayer dollars.”

“An essential mission of the Place of work of Inspector Common is to investigate allegations of fraud linked to the Department of Labor’s Workplace of Workers’ Compensation Programs. We will go on to function with our law enforcement companions and the Office of Workers’ Compensation Applications to protect the integrity of the department’s advantage plans and maintain all those who defraud them accountable as shown in today’s guilty plea,” mentioned Steven Grell, Exclusive Agent in Demand, Dallas Location, U.S. Department of Labor Business office of Inspector Standard.

“Billing for unnecessary drugs undermines the integrity of federal wellness care courses,” stated Jeffrey Breen, Special Agent in Demand at the Section of Veterans Affairs Office environment of Inspector Typical. “This responsible plea retains the defendant accountable for his criminal steps placing earnings prior to his patients’ health and fitness. We thank our regulation enforcement associates for their collaboration in this significant investigation.”

“Today’s responsible plea is a testament to the perseverance and willpower of the investigative and legal teams,” said Exclusive Agent in Demand Scott Pierce, U.S. Postal Service Office of Inspector General, Southern Space Area Office. “The Postal Service spends hundreds of thousands and thousands of dollars per year on well being treatment related expenses and these monies are essential to individuals who legitimately need health-related expert services. As in this scenario, our criminal investigators will diligently pursue any unique or business intent on defrauding the Postal Assistance with an eye on the two federal prosecution and returning lost monies to the affected program.”

In his plea settlement, Bernauer promised to promptly start out creating amends, by in 30 times spending $664,176.30 immediately to the Section of Labor, as restitution to the federal companies that had been major targets of the fraudulent scheme, and a even more $361,096.70 to the court docket clerk’s business office, to be dispersed to other insurers victimized by the conspiracy. Bernauer also acknowledged that he would be matter to an further restitution order of around $1,025,273, as a shared obligation with any of his co-conspirators who are afterwards convicted.

As a outcome of his responsible plea to the single conspiracy count, Bernauer could be sentenced to a greatest of five several years in prison. The courtroom will establish his sentence at a later on day, after reviewing a pre-sentence investigation report organized by the U.S. Probation Business, and looking at the U.S. Sentencing Rules and other statutory factors.

The circumstance was investigated by the Section of Defense, Protection Felony Investigative Provider, the Division of Labor Business of Inspector General,  the Division of Veterans Affairs Business of Inspector Basic, the U.S. Postal Provider Office environment of Inspector General, with the guidance of the Internal Earnings Provider-Criminal Investigation, the Louisiana Division of Justice, the Louisiana State Board of Medical Examiners, and the Louisiana Board of Pharmacy.

Assistant U.S. Lawyers Steven Mohlhenrich and Hunter Bridges prosecuted the scenario for the United States.