North Texas Is on the Leading Edge of Prosecuting Healthcare Fraud

Posted By American Med Spa Association, Thursday, November 4, 2021

The red flags at Forest Park Medical Center came early and often. Doctors at the Dallas hospital observed questionable practices, and partners noted vast sums of money being allocated for “marketing.” A 2016 lawsuit became a harbinger of trouble for the now-infamous Dallas operation. Dr. Lisa Umholtz, an early investor in the company, alleged that she was expelled for not sending enough patients to the hospital. Ultimately, Forest Park was revealed as being the core of a $200 million kickback scheme that, by the spring of 2021, sent 14 defendants to jail.

North Texas has emerged as a hotbed for healthcare fraud. The region ranked in 2019 as the third most active in the country for such offences. Although the total number of offenders nationwide has been trending down for the last several years, the median loss is rising, standing at $1.2 million in 2020. The National Health Care Anti-Fraud Association estimates that fraud costs the nation about $68 billion a year—or about 3 percent of all healthcare costs nationwide.

The U.S. government launched a healthcare fraud strike force in 2007, with Dallas taking on a significant role shortly after. The local office works with federal attorneys and uses data analytics to identify anomalies in healthcare claims data. By stopping bad actors, it is a solid financial investment for the government. “Healthcare fraud enforcement pays for itself,” says Jay Dewald, a partner at Norton Rose Fulbright who led the rollout of the region’s fraud strike force. “The return on investment for the prosecutor is off the charts.”

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