The Department of Justice has charged a former Chief Financial Officer with health care fraud violations related to falsely attesting that the Shelby Regional Medical Center (Shelby Regional), a now defunct 54-bed facility, met meaningful use requirements. On January 22, 2014, Joe White,of Cameron, Texas, was indicted by a federal grand jury in  the Eastern District of Texas, and charged with making false statements to the Centers for Medicare and Medicaid Services (CMS) and aggravated identity theft. [1]

Since the passage of the HITECH Act and the implementation of the Electronic Healthcare Record (EHR) Meaningful Use program, the Office of Inspector General (OIG) and others at the Department of Health and Human Services (HHS) have been concerned about the increases in claims. In a letter issued on September 24, 2012, Attorney General Eric Holder and HHS Secretary Kathleen Sebelius, jointly issued a letter warning that HHS was paying more attention to EHR related fraud. [2]

But, this action against Mr. White is based not on the claims, but actual attestations of Meaningful Use compliance. As explained in the Department of Justice Press Release:
According to the indictment, on Nov. 20, 2012, White falsely attested to CMS that [Shelby Regional] met the meaningful use requirements for the 2012 fiscal year.  However, Shelby Regional relied on paper records throughout the fiscal year and only minimally used electronic health records.  To give the false appearance that the hospital was actually using Certified Electronic Health Record Technology, White directed its software vendor and hospital employees to manually input data from paper records into the electronic health record (EHR) software, often times months after the patient was discharged and after the end of the fiscal year.
The indictment further alleges that White falsely attested to the hospitalís meaningful use by using another personís name and information without that individualís consent or authorization.  As a result of the false attestation, CMS paid Shelby Regional $785,655.00.  In total, hospitals operated by Dr. Mahmood [the owner of Shelby Medical Holdings, which owns Shelby Regional], including Shelby Regional [3], were paid $16,794,462.66 by the Medicaid and Medicare EHR incentive programs for fiscal years 2011 and 2012.
This issue is garnering attention from regulators and law enforcement agencies because of the amount of money involved.

According to the December 2013 numbers from CMS, to date, Medicare Eligible Professionals have been paid $4,079,968,376, Medicaid Eligible Professionals have been paid $2,566,267,286, and Eligible Hospitals have been paid $12,278,268,898. [4]


According to GovInfo Security [5],
An spokesman for the Department of Health and Human Services' Office of the Inspector General tells Information Security Media Group that this is "one of the first cases" to arise from an OIG investigation of submitting false HITECH Act EHR "meaningful use" attestations. He declined to discuss other HITECH Act related investigations under way. "This is an area of continuing interest" to the OIG, he says.
Healthcare companies and their employees must carefully review any Meaningful Use attestations that are being made to the federal government. An attestation is a legal statement which may be used against the individual as well as the company. This is a particularly important issue for employees, who can be individually charged with healthcare fraud and subjected to criminal penalties. For example, if convicted, Mr. White faces up to five years in federal prison for making a false statement and up to two years in federal prison for aggravated identity theft.


Posted by: Tatiana Melnik
Date: February 12, 2014
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[1] Press Release, U.S. Department of Justice, U.S. Attorney's Office - Eastern District of Texas, Former Hospital CFO Charged with Health Care Fraud, Feb. 6, 2014, https://www.justice.gov/usao/txe/News/2014/edtx-hcf-white-020614.html.

[2] Joe Carlson, Warning Bell: Potential for Fraud Through Use of EHRs Draws Federal Scrutiny, Modern Healthcare, Sept. 29, 2012, https://www.modernhealthcare.com/article/20120929/MAGAZINE/309299984.

[3] Marianne Kolbasuk McGee, HITECH Act EHR Program Fraud Alleged - Former Hospital CFO Charged with Submitting False Documents, GovInfo Security, Feb. 22, 2014, https://www.govinfosecurity.com/hitech-act-ehr-program-fraud-alleged-a-6498.

[4] CMS, EHR Incentive Program - December 2013 Summary, https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/December2013_SummaryReport.pdf.

[5] McGee, supra note 3.