A nurse practitioner was sentenced to 20 years in federal prison and ordered to repay $52 million for his role in a scheme to steal physicians’ identities and defraud Medicare and other insurers.
The Waxahachie provider, Trivikram Reddy, pleaded guilty to committing wire fraud in October 2020 and was sentenced last month. The fraud deceived major insurers—including Medicare, Blue Cross Blue Shield of Texas, Aetna, UnitedHealthcare, Humana, and Cigna—by creating false patient bills using the provider numbers of six doctors. All the claims were false. In early June 2019, federal agents investigated the clinic and found Reddy’s staff manufacturing medical records. Reddy closed his clinic immediately after the encounter.
“Mr. Reddy’s scheme defrauded multiple companies and put the professional reputation of six doctors in jeopardy—all to line his own pockets,” said Dallas FBI Special Agent in Charge Matthew DeSarno via release. “Along with our law enforcement partners, the FBI will continue to root out fraud in the healthcare industry and protect the public from illegal schemes.”
The following week, Reddy made the first of several wire transfers totaling more than $55 million between his accounts. A federal investigation connected the funds to the fraudulent claims submitted by Reddy. When federal agents requested medical records to justify millions in Medicare claims between 2014 and 2019, Reddy and his staff spent four months creating fake documents to give to authorities. At the time, Reddy operated three medical clinics in the area, including Waxahachie Medical, Texas Care Clinics and Vcare Health Services.
The National Health Care Anti-Fraud Association estimates that healthcare fraud in the U.S. costs the nation $68 billion each year, or about 3 percent of the nation’s $2.26 trillion in healthcare spending. Other estimates put the figure at 10 percent of total healthcare spending. Investigators use algorithmic data analysis to detect anomalies in billing practices, and when the formulas detect red flags in billing patterns, they investigate through groups like the Health Care Fraud Task Force, which has a branch in the Northern District of Texas.
According to the U.S. Sentencing Commission, the median loss for healthcare fraud was about $1.2 million, though nearly one in four cases included a loss of more than $3.5 million. The average sentence for healthcare fraud is 34 months. The Southern District of Florida has more fraud cases than any other region (130 in 2019), but the Southern and Northern District of Texas are No. 2 (31 cases in 2019) and 3 (23 cases in 2019) in the country for the number of fraud cases each year.
“When nurse practitioner Trivikram Reddy stole the identities of physicians to defraud Medicare and other insurers to enrich himself, he violated the basic trust that the public extends to healthcare professionals,” said Special Agent in Charge Miranda L. Bennett of the HHS-OIG Dallas Regional Office via release. “Today’s sentence sends a message to corrupt medical professionals that law enforcement will do everything possible to root out all forms of waste, fraud, and abuse in our federal health care programs.”