Businessman who acquired rural hospitals charged in $1.4B scheme

A Miami entrepreneur who led a rural hospital empire was charged in an indictment unsealed Monday in what federal prosecutors called a $1.4 billion fraudulent lab-billing scheme.

In the indictment, prosecutors said Jorge A. Perez, 60, and nine oth-ers exploited federal regulations that allow some rural hospitals to charge substantially higher rates for laboratory testing than other providers.

The indictment, filed in U.S. District Court in Jacksonville, Florida, alleges Perez and the other defendants sought out struggling rural hospitals and then contracted with outside labs, in far off cities and states, to process blood and urine tests for people who never set foot in the hospitals. Insurers were billed using the higher rates allowed for the rural hospitals.

Perez and the other defendants took in $400 million since 2015, according to the indictment. Many of the hospitals run or managed by Perez’s Empower companies have since failed as they ran out of money when insurers refused to pay for the suspect billing. Half of the nation’s rural hospital bankruptcies in 2019 were affiliated with his empire.

 

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