Terrance Bernard was sentenced to seven years in prison and ordered to pay $7 million in restitution in a healthcare fraud plot where he used stolen identification information to submit claims to insurers for COVID-19 tests that were never performed.
The Irving resident admitted that he and his co-conspirators obtained private patient information such as name, birth date, and insurance subscriber numbers from clinics where Bernard worked as a contract lab technician. He said he would take photos of information using burner phones or access large amounts of patient information through the clinics’ electronic health record system.
They would use the information to submit claims to Blue Cross Blue Shield, Cigna, United Healthcare, Aetna, Humana, and Molina Health Care for COVID-19 testing that was never performed on or requested by the patients, who were often unaware of what was happening.
The scheme is a common one, especially in North Texas. After corresponding with several individuals around the country who had received notification that COVID-19 tests had been ordered by alleged labs in North Texas using their Medicare information without their knowledge, D CEO Healthcare investigated. The addresses listed for at least four labs never existed or no longer exist. D CEO Healthcare could not track down anyone connected to the numerous labs that had been billing Medicare for COVID-19 tests patients never ordered. These North Texas labs were billing patients as far away as Indiana and South Carolina for COVID-19 tests the patients didn’t want and never ordered.
Barnard said the labs described in the claims, with names like TC Diagnostics, ME Diagnostics, and PHR Diagnostics, were shell entities that never operated as labs. The conspirators submitted $30 million in claims to insurance companies and received $7 million in payments for the fraudulent testing.
“These defendants took advantage of unsuspecting patients – and a global pandemic – to steal millions of dollars from insurers using private patient information,” said U.S. Attorney Leigha Simonton. “This sort of crime breaches patients’ trust and raises the cost of healthcare for all – at a time when access to medical care feels precarious to many.”
The conspirators opened bank accounts for the nonexistent labs where the insurance payments were sent and transferred the money from their fake lab company accounts to their personal bank accounts. According to the indictment, insurance companies reimbursed the lab from $75 to $225 for each fraudulent test. Other times, the conspirators billed insurance companies $350 to $400 for each fake test. The two used the money to purchase real estate and luxury vehicles.
The indictment lists millions of dollars in several accounts, including a 1965 Ford Mustang, a Ford Shelby GT, a Lexus SUV, and a 22-year-old Pontiac Grand Am. The indictment also lists a home outside of Tulsa, Oklahoma, as part of the forfeiture, should the two be convicted. Law enforcement seized $1.5 million during the investigation.
Barnard’s plea stipulates that he forfeits almost $2.5 million from bank accounts he controls, several properties, five vehicles, and five luxury watches.
Co-conspirators Connie Jo Clampitt, William Paul Gray, and Don Hogg plead guilty after being charged. Gray was sentenced to 54 months in prison, while Clampitt and Hogg will be sentenced on April 10 and May 1, respectively.
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