By: Christopher A Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, Ma.
A Health Law Defense and Compliance Firm

The U.S. Justice Department recently announced a significant settlement involving Floyd Calhoun Dent, III, which underscores the stringent measures being enforced against healthcare fraud and fraudulent financial maneuvers within the sector. This settlement not only highlights the government’s commitment to combating healthcare fraud but also serves as a cautionary tale for entities and individuals involved in healthcare administration and management.

Background of the Dent Case
Floyd Calhoun Dent, III was involved in a healthcare fraud scheme that led to a substantial judgment against him and two others for submitting false claims to Medicare and TRICARE. The fraud, amounting to $114 million as per the judgment affirmed by the Fourth Circuit Court of Appeals, was significant not just for its scale but for the subsequent actions taken by Dent to shield his assets from recovery.

The Scheme and Subsequent Actions
Following an investigation and initial subpoenas, Dent began transferring millions in assets, including cash, real estate, and luxury items, to family members and various corporations under his control. These actions were deemed fraudulent transfers intended to evade the repercussions of his fraudulent activities in healthcare. It was only after a rigorous legal pursuit under the Federal Debt Collection Procedures Act (FDCPA) that the Justice Department was able to secure a settlement.

Settlement Details
The settlement resulted in Dent and associated entities surrendering assets valued at over $33.6 million. These assets included real property, gold and silver coins, cash, and other personal property, which will now be managed by the Justice Department and the Liquidating Trustee for the now-bankrupt Health Diagnostic Laboratories Inc. (HDL), implicating a shared recovery for the United States and other creditors.

Implications for Healthcare Law
This case is a critical reminder of the legal and financial perils of engaging in or being complicit with healthcare fraud. For healthcare professionals and entities, it emphasizes the necessity of maintaining stringent compliance with healthcare laws and regulations. Moreover, it highlights the consequences of attempting to circumvent legal responsibilities through asset transfers or other means deemed fraudulent by courts.

1. Increased Scrutiny: Healthcare entities should anticipate heightened scrutiny of their financial transactions, especially those involving substantial asset movements following legal actions or investigations.
2. Asset Recovery Efforts: The federal government’s commitment to recovering assets involved in fraud schemes means that entities and individuals will face rigorous efforts to reclaim such assets for fraudulently obtained funds.
3. Legal and Financial Risks: Engaging in or facilitating fraudulent activities carries significant legal and financial risks, including substantial penalties and the potential for criminal charges.

Conclusion
The Dent case serves as an instructive example for all stakeholders within the healthcare industry about the severe implications of fraud and the lengths to which the government will go to enforce healthcare laws and recover fraudulently obtained assets. At Parrella Health Law, we advise our clients on the importance of compliance and the avoidance of any practices that could potentially lead to similar legal challenges. We provide expert guidance to ensure that your operations adhere to all applicable healthcare laws and regulations, thereby safeguarding your operations against such significant legal and financial risks. For healthcare providers, it’s crucial to have robust compliance programs in place and to conduct regular audits of financial and operational practices to prevent any actions that could be construed as fraudulent. If you need assistance evaluating your compliance strategies or navigating the complexities of healthcare law, contact Parrella Health Law for expert legal counsel at 857.328.0382 or via email at cparrella@parrellahealthlaw.com.

Christopher Parrella, ESQ, CPC, CHC, CPCO, is the founding partner of Parrella Health Law in Boston, Mass. The firm focuses exclusively on healthcare defense and compliance matters. Chris also travels the country on behalf of a wide range of healthcare organizations, lecturing on a variety of health care enforcement and compliance topics. Chris is one of a handful of health care attorney’s that are also Certified Professional Coders (CPC) and is a member of the AAPC’s National Legal Advisory Board and Ethics Committee.  He is also a Certified Professional Compliance Officer (CPCO) and Certified in Health Care Compliance (CHC.)