A federal judge has dropped many of the charges of Medicare fraud against two Kansas osteopaths, but the state's U.S. attorney will appeal the dismissals.
U.S. District Judge John Lungstrum in Kansas City, Kan., threw out seven counts of "program fraud," or taking bribes from specific hospitals in return for patient referrals, because he said they didn't fall within the law's jurisdiction.
The accused are Robert LaHue, D.O., and his brother Ronald LaHue, D.O. They were principal owners of Blue Valley Medical Group, a now-defunct practice that specialized in geriatric care at nursing homes. The LaHue brothers were charged with soliciting bribes from seven hospitals in Missouri and Kansas for Medicare referrals.
In dismissing the charges, the judge accepted the argument made by Jeffrey Morris, one of Ronald LaHue's attorneys, that to violate the Medicare fraud statute, a person or institution has to receive a federal benefit of more than $10,000 a year. Morris said that patients, not providers, are the recipients of Medicare benefits. Fifty-two counts of money-laundering and one count asking for forfeiture of assets against Robert LaHue also were dismissed.
U.S. Attorney Jackie Williams is appealing the ruling. The trial, originally scheduled for April 14, has been delayed until May 26, but that could change, too.
The judge left intact the allegation of conspiracy against both brothers. That count says they conspired to refer patients to hospitals so they would have increased patient census and revenues. Also on the docket against both is a count of false claims conspiracy. Robert LaHue faces one count of witness tampering.
Last September, Baptist Medical Center in Kansas City, Mo., agreed to pay $17.5 million in fines to settle allegations that it paid kickbacks to the LaHues for Medicare referrals, the largest such fine in Medicare annals. Bethany Medical Center in Kansas City, Kan., settled similar charges in 1996 for $1.2 million.
A Baptist employee, Thomas Eckard, was Blue Valley's administrative manager and tried to recruit other hospitals to participate in the scheme.
Eckard pleaded guilty to soliciting a bribe and served five months in federal prison.