Paying medical providers or provider-owned laboratories in exchange for referrals encourages providers (we really mean fraudsters here) to order and seek payment for medically unnecessary services. The Anti-kickback statue functions to discourage such behavior. Northwest Physicians Laboratory was owned by Richard Reid. Therefore, NPL was provider owned. For that reason, NPL could not test or receive reimbursement of urine samples for patients covered by government health programs such as Medicare. But as they say, life is a matter of semantics, because words are the tools with which we work.
And for a fraudster like Reid, he knew how to use words.
To conceal the kickbacks, Reid rewrote description of the urine testing to “marketing services.” Because the government would prefer to pay for marketing services and not actual testing? Must be true because the government paid NPL $6.5 million between the two labs for marketing services rendered. Reid also moved the urine testing to two labs that could bill the government for testing.
Richard Reid was eventually caught for his play on words and in March 2022 he was convicted for his scheme to profit from illegal kickbacks in the medical testing industry. After his conviction, Reid had repeatedly petitioned the judge to delay his prison reporting date, claiming to have COVID-19 and then long COVID. The judge had enough and on January 10, 2023, Richard Reid was sentenced to two years in prison. He was supposed to appear in court at the end of April but…surprise! He did not show. What a shock. After an extensive search, Reid was arrested by the Clatsop County Sheriff’s Office after members of the public saw him and alerted law enforcement.
Kudos to the Sheriff’s Office for catching this convicted fraud.
Today’s Fraud Of The Day is based on article “Oregon man who failed to surrender to start serving sentence in WA fraud case arrested in Westport” published by Oregon Live on May 10, 2023
Richard Reid was one of the co-owners of the now-defunct Northwest Physicians Laboratory, based in Bellevue, Wash., which received over $3.7 million in illegal kickback payments, according to federal prosecutors. Richard Reid, who failed to surrender to start serving a two-year federal prison term for profiting from illegal kickbacks from the medical testing industry, was arrested in Clatsop County and appeared Wednesday afternoon in federal court in Portland.
Reid, 54, former co-owner of the defunct Northwest Physicians Laboratory based in Bellevue, Washington, was convicted in March 2022 in federal court in Seattle and had repeatedly asked a judge to delay his date to report to prison, claiming to have COVID-19 and then long-COVID symptoms, according to the U.S. Attorney’s Office in Washington.