Rare charges accuse CEO of over-billing San Jose for spinal implants

In a YouTube video on her website, Trudy Maurer offers spinal injury patients help as they “navigate through the maze of bureaucracy” for insurance coverage. Her company advertises key spinal implants at no cost to hospitals.But there was one crucial detail she left out, South Bay prosecutors said: Maurer and her company were drastically overbilling Santa Clara County and San Jose taxpayers for the cost of spinal implants for government employees, allowing her to profit tens of thousands of dollars while the public agencies were forced to compensate by jacking up workers’ compensation premiums.The Santa Clara County District Attorney’s Office on Wednesday announced criminal charges against Maurer, 67, and her company’s medical director, 39-year-old Tigran Shahsuvarya. Though prosecutors say this type of fraud may be somewhat common, it’s believed to be one of the first criminal cases of its kind in the state because investigations into the activity are so painstaking and the practice often flies under the radar.
“Medical scams are a big problem in the insurance industry,” said deputy district attorney Katharina Wells. “Billing fraud can be very difficult to prove.”
Reached Wednesday at the San Francisco office of her company, Implantium, which is still apparently in operation, Maurer said her attorney, Richard Moss, advised her not to comment. But Moss praised Maurer as a law-abiding citizen with 12 years in the industry.
“Frankly, I’m very confident that Trudy is not guilty of any criminal wrongdoing here,” Moss said, adding that he wanted to review the evidence before commenting on the specific charges.The attorney for Shahsuvarya, who is alleged to have participated in the scheme and is also free on bail, could not immediately be reached for comment Wednesday.Maurer also is the CEO of the Spine Network of California, which operates out of the same office as Implantium and promotes itself as a service to connect patients with spine surgeons and help patients clear their insurance requirements.If convicted, the San Francisco residents could face up to 13 years in prison and up to $450,000 in fines plus restitution. They will each appear in court next week for the first time to face nine felony fraud charges apiece.Implantium works as the billing company for spinal surgeries, buying implant devices from manufacturers and supplying them to hospitals without actually ever handling the products, prosecutors said. The hospitals implant the devices into the backs of injured workers, and Implantium recovers its cost of the product by billing the patients’ workers’ compensation insurance carriers.By law, companies like Implantium are allowed to profit up to $250 per device, prosecutors say. But Maurer is accused of altering invoices for the implants by as much as tens of thousands of dollars, allowing her to receive compensation from the insurance carriers that went way beyond what they paid for the device, prosecutors said. In this case, the invoices, dating back to 2008, were sent to the county of Santa Clara and the city of San Jose, which are self-insured for workers’ compensation.Wells said her office is working with prosecutors in Los Angeles, San Diego and Sonoma counties, where the pair are suspected of defrauding two large, private insurance companies.But Moss said a ruling in October 2008 allowed non-hospital companies like Implantium to collect fees over $250.”If you stuck to that, you’d be out of business before you blink an eye,” Moss said, while acknowledging that overbilling, if proved, would still constitute fraud.All companies — not just government agencies — are required to have workers’ compensation insurance in California. When they are overbilled, their rates rise — usually causing them to pass the cost onto employees and customers.Wells says prosecutors rarely file charges in these types of cases because it is so time-intensive to prove. It takes a sharp eye and then an audit; in this case, a San Jose city attorney noticed something amiss in their billing.”These scams are probably one of the largest cost drivers involving workers’ compensation fraud,” Donald Marshall, chairman of the state Fraud Assessment Commission, said in a statement on the case. “Any time a provider or a person bills the workers’ compensation system in excess of what should be paid, then it impacts every employer in California because (it) impacts their rates.”
Source:Mike [email protected]