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Radiologist accused in $17 million 'medical mill' scheme

by Brendon Nafziger, DOTmed News Associate Editor | June 14, 2011
O.C. District Attorney
Tony Rackauckas
A California radiologist and three of his employees were accused in a $17 million workers' compensation insurance overbilling scheme, according to a grand jury indictment unsealed Monday.

The 181-page, 884-count indictment released by the Orange County district attorney's office and the California Department of Insurance accuses Dr. Sim Hoffman, 59, a Newport Beach radiologist, and his three co-workers of billing for medical procedures that were unnecessary or never performed.

Hoffman is the owner of imaging, sleep and nerve test clinics Advanced Professional Imaging, Advanced Management Services, and Better Sleeping Medical Center in Buena Park, Calif.

Also charged were Dr. Thomas Michael Heric, 74, a neurologist from Malibu who worked at the Better Sleeping clinic, medical administrator Beverly Mitchell, 60, of Westlake Village, and bill collector Louis Santillan, 44, of Chino Hills.

According to the Orange County District Attorney Tony Rackauckas, the alleged scam had two parts. In the first part, Rackauckas accused Hoffman of billing for epilepsy and seizure testing on 1,247 patients from 2007 to 2008 without actually conducting the tests.

In the second, Hoffman is accused of performing a simple nerve test (EMG) on patients for workers' compensation claims, but instead fraudulently billing insurance companies for a much more expensive and complicated nerve test (Single Fiber EMG) -- so complicated that only two doctors in California are qualified to perform it, according to the district attorney.

"Hoffman is not one of those two doctors," Rackauckas said in media briefing transcript on the OC Weekly website. "This scheme resulted in over $9 million in fraudulent billing. Most of the patients were blue collar workers and the majority was Spanish-speaking."

Both doctors have been in trouble before. In 2001, Hoffman was disciplined by the Medical Board of California for excessive billing and for subjecting a patient to a medically unnecessary radiological procedure, according to the district attorney. In 2008, Heric's medical license was suspended for 60 days following a 2008 medical fraud conviction.

Hoffman and Mitchell were charged with 883 felony counts of insurance fraud and one count of aiding and abetting the unauthorized practice of medicine. If convicted on all charges, they face a maximum of 892 years in prison.

Heric was charged with 296 counts of insurance fraud and one felony count of aiding and abetting the unauthorized practice of medicine. If convicted, he faces up to 315 years in prison.

Santillan was charged with 141 felony counts of insurance fraud and faces up to 150 years in prison, if convicted.

All four defendants are out on bail, with an arraignment scheduled for June 22. A hearing on the revocation of Hoffman's and Heric's medical licenses, a condition of the bail, is also set for that time.

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