The former chief executive officer of a small Louisiana hospital admitted last week that he bilked the government out of $1.4 million by using the hospital to bill the government for services at clinics that weren't approved for Medicare.
Joseph Soileau, 58, pleaded guilty in U.S. District Court in Lake Charles, La., to one count of wire fraud, punishable by up to five years in prison and a $250,000 fine. Soileau, who is free on bond, was ordered to turn himself in to federal marshals July 18. Sentencing is scheduled for Sept. 17.
Separately, Soileau is expected to stand trial in August on state felony theft charges for allegedly stealing more than $400,000 in hospital funds while he was CEO of South Cameron Memorial Hospital in Cameron, La. The hospital filed for Chapter 9 bankruptcy protection in November 1999 (Oct. 16, 2000, p. 50). Its largest creditor is Medicare, to which it owes an estimated $8 million for overpayments.
Soileau's attorney did not return phone calls requesting comment last week.
In the federal case, prosecutors alleged that Soileau used the hospital's Medicare provider number to bill for $1.4 million of rehabilitation services at 34 independent clinics across the state from August 1998 to March 1999. The state's Medicare fiscal intermediary, Blue Cross and Blue Shield of Mississippi, caught on to the scheme when it noticed that the 33-bed hospital, in southwest Louisiana on a remote stretch of the Gulf of Mexico, was billing for physical therapy services for hundreds of patients at a time, said Kelly Uebinger, assistant U.S. attorney for the Western District of Louisiana in Lake Charles.
Previously, the services had been billed to Medicare by a private agency operated by Soileau. The agency was terminated from Medicare in 1998, according to prosecutors, because it didn't supervise the clinics, some of which were hundreds of miles away. The clinics were not approved to provide services for Medicare.
Soileau pocketed more than $500,000 of $1.4 million billed to Medicare, Uebinger said. She said a financial analysis of his records showed the money was spent or given to relatives, including his ex-wife and three adult children, who live in the area.
Based on interviews with clinic owners and physical therapists, prosecutors determined that services were performed. Uebinger said the clinics could have applied for their own Medicare provider numbers. "It's paperwork- intensive," she said.
Uebinger said no one at the hospital questioned Soileau when he ordered the bills to be submitted, in part because he appeared to board members to be doing a good job. "He pretty much had complete control of the hospital," she said.