On Monday, it was announced that 44-year-old Jody Sheffield of Austin, Texas had pleaded guilty to one count of conspiracy to commit health care fraud related to a scheme to defraud TRICARE. The defendant was accused of trying to defraud TRICARE by submitting unnecessary toxicology and DNA cancer screening tests. The defendant will now face a maximum penalty of five years in prison and a $250,000 fine.
According to the plea agreement, Sheffield served as the operations manager for ADAR Group LLC, which is an outpatient toxicology testing facility. The ADAR Group was owned and operated by Erik Bugen. Matthew Hawrylak and Britt Hawrylak were marketers for Progen Lab Systems, Xpress Laboratories and financiers of ADAR Group. From May 2015 to May 2016, ADAR group collected saliva and urine samples from TRICARE.
These samples were ultimately sent to Progen Labs and Express Laboratories. TRICARE and private insurance companies were billed for unnecessary DNA cancer screening and toxicology tests. Bugen and Sheffield encouraged TRICARE beneficiaries to provide urine and saliva samples by offering $50.00 Wal-Mart gift cards. The defendants disguised the kickback payments as a food assistance program for low-income soldiers.
Doctors were paid monthly fees to sign test forms. Bugen acquired signature stamps from doctors, while Sheffield and other ADAR Group employees stamped the testing order forms. Beneficiaries did not meet with the doctors prior to the testing nor did they receive test results. As a result of the scheme, TRICARE was billed roughly $36 million for tests that were not necessary.
In total, TRICARE paid approximately $4.8 million. Again, 44-year-old Jody Sheffield has pleaded guilty to a single count of conspiracy to commit health care fraud. Additional details are available here.