ATLANTA — A former Georgia insurance commissioner who ran unsuccessfully as a Republican for Georgia governor has pleaded guilty to conspiracy to commit health care fraud.
John W. Oxendine, of Johns Creek, entered the guilty plea Friday in federal court in Atlanta. The 61-year-old was indicted in May 2022 on charges of health care fraud conspiracy and money laundering conspiracy.
The crime carries a maximum penalty of 10 years in prison, but Oxendine is likely to receive a lesser sentence. The federal sentencing guidelines discussed in the plea agreement suggest prosecutors could sentence Oxendine to 51 to 63 months in prison, depending on U.S. District Judge Steve Jones’ ruling at a sentencing hearing scheduled for July 12. It is suggested that a sentence be recommended. Jones may fine Oxendine and issue the following orders: Provides supervised release.
Oxendine also agreed to pay nearly $700,000 in restitution to health insurance companies that lost money under the plan, the attorney said. Prosecutors agreed to dismiss the money laundering charges as part of their arguments.
“As a former statewide insurance commissioner, John Oxendine recognized the importance of honest dealings between physicians and insurance companies,” U.S. Attorney Ryan K. Buchanan said in a statement. “But for his personal benefit, he knowingly conspired with doctors to order hundreds of unnecessary laboratory tests, costing hundreds of thousands of dollars.”
Prosecutors say Oxendine conspired with Dr. Jeffrey Gallups to pressure other doctors practicing under Gallups and to cause unnecessary damage to Next Health, a Texas research institute. They allege that he pressured them into ordering additional medical tests. Prosecutors said Mr. Oxendine promoted the plan in a September 2015 presentation to doctors working at his Gallups clinic.
According to Oxendine’s indictment, he and Gallups agreed to pay Gallups a 50% kickback on the profits Oxendine made from the tests. Prosecutors say Next Health paid $260,000 in kickbacks through Oxendine’s insurance consulting firm. Oxendine paid Gallups $150,000 in charitable donations and $70,000 in his legal fees, prosecutors said, and kept $40,000 for himself.
Some patients were also charged and received bills of up to $18,000 for testing, prosecutors said.
Prosecutors alleged that when Mr. Oxendine was asked about the payments by Gallups’ compliance officer, Mr. Oxendine lied to Mr. Gallups and said the payments from Mr. Oxendine were loans. Prosecutors said Oxendine instructed Gallups to repeat the same lies when questioned by federal agents. And they say Oxendine falsely stated in an interview with the Atlanta Journal-Constitution that he did not work for the lab company or receive money from Next Health. Stated.
Gallups pleaded guilty in October 2021 to one count of health care fraud after waiving the charges. Mr. Gallups was sentenced in June 2022 to three years in prison, and was also ordered to pay $700,000 in restitution and pay a $25,000 fine.
In 2021, Gallups will pay $3 million after a whistleblower filed a lawsuit alleging that Gallups defrauded the federal government through its Next Health scheme and a kickback scheme with another medical device company. agreed. That amount was increased to nearly $5.4 million in March after Gallups and his company, Milton Hall Surgical Associates, failed to pay the original amount within a year.
Next Health also faces other fraud allegations. The company and related persons and entities were ordered to pay $218 million to health insurance company UnitedHealth in 2023 in a Texas lawsuit.
Mr. Oxendine served as state insurance commissioner from 1995 to 2011. He ran for governor in 2010, but lost in the Republican primary. The state Ethics Commission opened a campaign finance case against Oxendine in 2009, alleging that he violated state law by using campaign funds to buy homes, lease luxury cars and join private clubs. An investigation and prosecution have begun.
Oxendine settled the case with the Georgia Ethics Commission in 2022, denying any wrongdoing but agreeing to turn over the remaining $128,000 in campaign funds.
He is also accused of receiving a lump sum contribution of $120,000, 10 times the legal limit, from two Georgia insurance companies in 2008 while running for governor. The judge ruled that state authorities waited too long to pursue Oxendine on these charges.
