Medicaid Fraud Complaint Filed Against Former Physicians And Their Business Entities

            HAMMOND - United States Attorney Thomas L. Kirsch II and Indiana Attorney General Curtis T. Hill, Jr. announced today the filing of a civil Medicaid fraud complaint against former physicians Don J. Wagoner, age 81, of Burlington, Indiana and Marilyn L. Wagoner, age 80, of Burlington, Indiana, and their business entities, Wagoner Medical Center, L.L.C., Wagoner Medical Center, P.C., and Don J. Wagoner, M.D. and Marilyn L. Wagoner, M.D., P.C. for filing false claims.

According to documents in this case, during 2011-2013, former physician Don J. Wagoner and his wife, former physician Marilyn L. Wagoner, practiced medicine together at Wagoner Medical Center.  Defendants had a routine practice of requiring patients seeking a prescription for opioid pills or other pain medicine to submit a urine sample for qualitative testing for the presence or absence of nine or more drugs or drug classes.  Using a multiplexed screening kit costing defendants no more than approximately five dollars, defendants tested each single urine sample for the same patient on the same day using the simple kit.  Defendants then billed Indiana Medicaid and received $171.27 per patient, even though Indiana Medicaid billing rules only allowed them to bill $20.83 per patient.  Defendants concealed this fraud by falsely certifying to Indiana Medicaid that they had collected and separately analyzed nine or more urine samples from each patient, when in fact they only had collected and analyzed one urine sample.  Defendants perpetrated this fraudulent scheme for over 6,400 claims, and received a total overpayment from Indiana Medicaid of over $1.1 million.

            The federal False Claims Act, and the Indiana Medicaid False Claims Act, allows the federal government and the State of Indiana to recover three times the amount of the false and fraudulent claims submitted to Indiana Medicaid plus a civil penalty of $5,500 to $11,000 per false claim submitted.  A small portion of recoveries under the federal False Claims Act, three percent, is used to fund the cost of future health care fraud investigations and cases.

            In 2013, defendants Don J. Wagoner and Marilyn L. Wagoner permanently surrendered their licenses to prescribe drugs and to practice medicine in connection with a state criminal investigation of their opioid-prescribing practices, which resulted in felony drug dealing convictions of Mr. Wagoner. 

“Although they no longer are endangering vulnerable Medicaid patients by practicing medicine, former physicians Don Wagoner and Marilyn Wagoner cannot be allowed to retain the fruits of their fraudulent Medicaid claims,” said United States Attorney Thomas L. Kirsch II.  My Office will continue to make it a priority to pursue investigations and cases to recover funds that were fraudulently received from the Medicare and Medicaid programs.”

The Justice Department’s Commercial Litigation Branch have given a high priority to civil prosecution of health care fraud, including Medicare and Medicaid fraud.

“Working to recover taxpayer funds taken through fraud and other illegal means is part of our responsibility as stewards of the public trust,” said Indiana Attorney General Curtis T. Hill, Jr.  “We appreciate the collaboration of our federal partners in this particular case, and we intend to remain vigilant going forward to make sure monies set aside to help society’s most vulnerable members are truly used for that purpose.”

The United States Attorney’s office emphasizes that a Complaint is merely an allegation and that the United States and Indiana are required to prove their allegations before defendants can be found liable.

This suit was filed as the result of an investigation by the United States Attorney’s Office for the Northern District of Indiana and the Indiana Medicaid Fraud Control Unit.  Assistant United States Attorney Wayne T. Ault will be the United States’ lead counsel in this civil litigation.  Lead counsel for co-plaintiff, the State of Indiana, is Supervising Deputy Attorney General Steven A. Hunt.

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