John Oxendine, Health Care Fraud, Georgia 2023

ATLANTA - Former Georgia State Insurance Commissioner John W. Oxendine pleaded guilty today to conspiracy to commit health care fraud in a kickback scheme that cost hundreds of thousands of dollars.

Oxendine, 67, was accused of conspiring with Dr. Jeffrey Gallups and others to submit fraudulent insurance claims for medically unnecessary tests. The scheme involved ordering unnecessary medical tests in exchange for hundreds of thousands of dollars in kickbacks from a lab company in Texas.

According to U.S. Attorney Ryan K. Buchanan, Oxendine conspired with Dr. Gallups and others to submit fraudulent insurance claims for medically unnecessary Pharmacogenetic, Molecular Genetic, and Toxicology testing. Physicians associated with Dr. Gallups’s ENT practice were pressured to order these medically unnecessary tests from Next Health, a lab in Texas.

Oxendine gave a presentation at the Ritz Carlton in Buckhead where he pressured doctors in Dr. Gallups’s practice to order the unnecessary tests. Next Health later submitted insurance claims seeking more than $2,500,000 in payments from private health insurers for the unnecessary tests. The insurance companies paid almost $700,000 to Next Health because of these fraudulent claims.

Next Health then paid $260,000 in kickbacks to Oxendine and Dr. Gallups. Some patients were also charged for the tests, receiving bills of up to $18,000. To conceal the kickback payments, Oxendine and Dr. Gallups arranged for the payments to be made from Next Health to Oxendine Insurance Services, Oxendine’s insurance consulting business.

Oxendine used a portion of the kickback money to pay debts for Dr. Gallups: a $150,000 charitable contribution and $70,000 in attorney’s fees. When a compliance officer at Dr. Gallups’s practice raised concerns about the kickbacks, Oxendine told Dr. Gallups to lie and say the payments from Oxendine to Dr. Gallups were legitimate business transactions.

Oxendine, who is currently awaiting sentencing, faces up to 5 years in prison and a fine of up to $250,000.

Criminal Charges: Conspiracy to commit health care fraud

City and State: Atlanta, Georgia

Exact Date: May 30, 2023

Sentence or Outcome: Awaiting sentencing, faces up to 5 years in prison and a fine of up to $250,000

Dollar Amounts: $2,500,000 (insurance claims), $700,000 (insurance payments), $260,000 (kickbacks), $18,000 (patient bills), $150,000 (charitable contribution), $70,000 (attorney’s fees)

Source: https://www.justice.gov/usao-ndga/pr/former-georgia-insurance-commissioner-john-oxendine-pleads-guilty-health-care-fraud