Father and Son Clinic Owners to Pay $2 million to Settle False Claims Act, Anti-Kickback Statute and PPP Fraud Allegations

The owners Amerihealth in eastern Idaho have agreed to pay $2 million to settle allegations they violated the False Claims Act.

According to the U.S. Department of Justice, father and son Ryan and Alban Hatch engaged in a healthcare fraud scheme that involved hiring vulnerable or inexperienced medical staff and pressuring them into providing unnecessary and worthless care and then submitting false claims to Medicare, Medicaid and TRICARE.

The agreement also resolved, without the defendants admitting, additional allegations that they violated the Controlled Substances Act, the Anti-Kickback Statute, and fraudulently obtained Paycheck Protection Program (PPP) loans.

Company Background

According to the complaint filed in December 2023, the Hatches formed Amerihealth in 2012 for the purpose of purchasing and/or operating healthcare clinics. Between 2012 and 2022, the Hatches formed other businesses and/or registered assumed business names including Stat Diagnostics, Inc., AmeriHealth, Inc., and America Healthcare, Inc.

(It’s important to note that the company is unrelated to Amerihealth New Jersey Holdings, LLC, AmeriHealth HMO, Inc., AmeriHealth Insurance Company of New Jersey, or Amerihealth Caritas.)

Among other things, the clinics provided patients with urgent care, drug treatment and pain management services.

It was alleged that the father and son team hired inexperience or “compromised” staff because they were less expensive and more likely not to comply with the law.

“Defendants’ recklessness in hiring and supervising such practitioners created an environment in which drug-seeking patients would schedule office visits that could then be billed to insurance,” the complaint states.

Impaired and Unqualified Practitioners

In one case, the government alleged that the Hatches ordered a hungover and impaired practitioner to provide medical care to unsuspecting patients. To that end, the complaint states that even though the practitioner declined to come to work stating they were hungover, a medical assistant was dispatched to the provider’s home and brought the provider to the office so that they did not have to cancel appointments and lose revenue.

In another case, last June, nurse practitioner Rachel Peay-Goodman admitting that she unlawfully prescribed controlled substances and submitted false claims to Medicare while working for AmeriHealth. The judgment found Peay‑Goodman civilly liable for violating the Controlled Substances Act and the False Claims Act and required her to pay a $75,000 fine and surrender her DEA license.

According to the complaint, Peay-Goodman wrote prescriptions for dangerous combinations of drugs to at least one patient, including simultaneous prescriptions for oxycodone, lorazepam, alprazolam, and zolpidem tartrate. 

The complaint stated that the Hatches “knew or should have known (the nurse) had never before prescribed controlled substances or treated pain management patients.”

The Hatches reportedly told the nurse to continue prescribing controlled substances to pain management patients even after the Hatches medical director told them the nurse’s “lack of experience was causing (the nurse) to issue unsafe and unlawful prescriptions that lacked a legitimate medical purpose.”

Peay-Goodman admitted that such prescriptions lacked a legitimate medical purpose and were written outside the usual course of professional practice.  As part of the consent judgment, Peay‑Goodman also admitted to submitting at least one false claim to Medicare. 

Improper Relationship with Lab

The complaint also alleged that in 2015 Amerihealth contracted with a lab and instructed its healthcare providers to refer urine testing to that lab. The lab, in turn, paid Amerihealth monthly commissions in violation of the Anti-Kickback Statute and False Claims Act.

The complaint states that the payment of commissions took place between 2016 and 2022.

PPP Loan Fraud

Finally, the complaint states that Amerihealth violated the False Claims Act by applying for a second Paycheck Protection Program (PPP) loan in the amount of $783,802.50 and falsely stating that they were not engaged in illegal activity and, that they used all first and second draw PPP funds for eligible expenses.

However, the complaint stated that the money was used for non-eligible expenses, including personal travel and home renovations.

The Crackdown Continues

Late last year, the U.S. Department of Justice said it would be adding another 75 prosecutors to investigate healthcare fraud. The DOJ uses nine strike force teams to target healthcare fraud. These teams, which are made up investigators and prosecutors are located across the U.S.

The Strike Force Model uses advanced data analysis techniques to identify questionable billing practices in healthcare fraud “hot spots”—cities with high levels of billing fraud—combined with traditional investigative techniques to target suspicious billing patterns as well as emerging schemes and fraudulent practices that migrate from one community to another.

The Health Law Offices of Anthony C. Vitale has been representing clients under investigation for more than three decades. The firm conducts confidential defense investigations and will take you through the process to reduce or eliminate criminal, civil, licensure and administrative liability. Our firm represents healthcare professionals in state and federal court who are charged with fraudulent billing, kickbacks, Medicare and Medicaid fraud and false claims, among others. For more information, contact us at 305-358-4500 or email info@vitalehealthlaw.com.