15 December 2004 – LAWFUEL – First with law news – The United States Attorney’s Office for the Northern District of California announced that a federal grand jury in San Jose has indicted Neil Philip McArthur on three counts of medicare fraud. Mr. McArthur was charged with defrauding Medicare of over $800,000 between January 1, 1998 and January 10, 2000. During this time, he was employed by the Monterey Family Practice Medical Center (MFP) and Alpha Healthcare Management Services (Alpha) in Monterey, California.
Mr. McArthur, 53, and formerly of Carmel, California, but now residing in San Francisco, is charged with 1) conspiracy to commit health care fraud, 2) health care fraud, and 3) making a false statement pertaining to health care fraud.
According to the indictment, which was returned on December 1, 2004 and unsealed today after the defendant was arrested this morning, Mr. McArthur used his position as the administrator for MFP to steal over $800,000 from Medicare by routinely submitting false and fraudulent bills for medical services that: a) had not been rendered, b) had been “upcoded” to reflect a more expensive procedure than was actually performed, and c) were rendered by unlicenced or unqualified personnel.
According to the indictment, MFP, now defunct, was a California corporation consisting of a number of physicians practicing in the Monterey area. Alpha was a billing services company for MFP and other physicians’ groups. Mr. McArthur was employed by both MFP and Alpha, and handled the billing services for MFP on both ends.
Mr. McArthur allegedly took “superbills” (a pre-printed document used by doctors and nurses to reflect medical services performed, treatments ordered, and diagnoses rendered during a particular patient visit) turned in by MFP doctors and added services such as urinalyses, x-rays, and electrocardiograms. In other instances, McArthur allegedly “upcoded” services to reflect more expensive levels of service than those that were actually performed. Finally, McArthur allegedly billed services performed by a nurse as if they had been performed by a doctor.
Mr. McArthur was arrested today at outside his residence in San Francisco, California. He made his initial appearance before Chief Magistrate Judge Patricia V. Trumbull, who ordered him released on $100,000 bail. The defendant’s next scheduled appearance is Wednesday, December 22, 2004 before Magistrate Judge Trumbull for identification of counsel.
The maximum statutory penalty for count one in violation of Title 18,U.S.C. § 371 and count three in violation of Title 18, U.S.C. § 1035 is five years imprisonment. The maximum penalty for count two in violation of Title 18, U.S.C. § 1347 is ten years imprisonment. Each count carries a maximum penalty of the greater of $250,000 or twice the gain or loss from the offense, a three year term of supervised release following release from prison, and restitution. However, any sentence following conviction would be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed in the discretion of the Court. An indictment only contains allegations against an individual and, as with all defendants, Mr. McArthur must be presumed innocent unless and until convicted.
The prosecution is the result of a four-year investigation by agents from the Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Defense Criminal Investigative Service. The audit that led to the discovery of the fraud was conducted by the National Heritage Insurance Corporation. David Callaway is the Assistant United States Attorney who is prosecuting the case with the assistance of Legal Assistant Tracey Andersen.
A copy of this press release and related court filings may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can . Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on .
All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay3@usdoj.gov .