Alleged $40 Million Kickback Scheme Involves Medical Office Deals

Several former hospital executives in Texas have been accused of participating in a multimillion-dollar kickback scheme involving, among other things, deals on medical office building space.

Specifically, a federal jury recently indicted executives at Forest Park Medical Center in Dallas for paying $40 million in various kickbacks and bribes to health care professionals in return for patient referrals to the now-bankrupt hospital, The Wall Street Journal reported.

The executives are accused of paying primary care physicians, chiropractors, surgeons and other health care professionals for patient referrals. The reported bribes also included deals on medical office building space, custom cowboy boots, sporting event tickets and free carwashes, WSJ reported, citing a 44-page document filed in U.S. District Court in Dallas.

The bribes, which took place between 2009 and 2013, allegedly brought business to Forest Park Medical Center, allowing it to bill more than $500 million to government-administered health care programs like Medicare and various medical insurers, the indictment states.

Criminal charges have been filed against 21 individuals, including anesthesiologist Richard Ferdinand Toussaint Jr., who led the hospital’s board of directors, and COO Alan Andrew Beauchamp. Toussaint and Beauchamp co-founded the hospital, along with additional investors.

Beauchamp pleaded not guilty to the charges on Dec. 1, WSJ reported, citing court records. Toussaint’s attorney did not comment to WSJ on the charges.

Forest Park Medical’s hospital in Dallas was the first of multiple Forest Park Medical Center locations built across Texas by investors who placed a “high-stakes bet” on a business model whose success relied on attracting wealthy patients who could afford to pay an elevated price for medical care, according to WSJ. The Dallas hospital ceased to operate in October 2015 after years of falling revenue, and it was sold out of bankruptcy to a separate hospital operator earlier this year.

Forest Park Medical’s other locations also encountered financial trouble, eventually filed for bankruptcy and were sold to other health care companies, WSJ reported.

Written by Mary Kate Nelson