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Federal Podiatry Medicare Fraud Charges – What You Need to Know

Federal Podiatry Medicare Fraud Charges – What You Need to Know

Federal investigators are prosecuting podiatrists for Medicare fraud at increasing rates. If your practice bills Medicare for podiatric services, you need to understand what federal prosecutors are looking for. Here is the first thing you should know: podiatry Medicare fraud prosecutions result in devastating federal prison sentences. Kenneth Mitchell received 7 years in federal prison for orchestrating a $2 million fraud scheme – and he was already suspended from Medicare when he did it. He continued billing under a false identity. David Jenson is facing 14 counts of healthcare fraud for a $45 million skin substitute scheme in Houston. These are not theoretical outcomes.

Welcome to Spodek Law Group. We handle federal healthcare fraud defense cases regularly, including cases where podiatrists first realize they are facing serious criminal exposure through exactly this kind of investigation. The second thing you need to understand is this: the Department of Justice is specificaly targeting podiatrists. “Foot bath” schemes. Skin substitute fraud. Routine foot care billed as medically necessary services. Federal prosecutors view podiatry billing as a fraud-prone specialty – and the sentences are devastating.

Heres something most podiatrists dont realize about Medicare billing rules. The paradox is brutal. Nathan Lucas prescribed antibiotic and antifungal capsules, creams, and powders to be mixed into a tub of water for patients to soak their feet. These drugs were not indicated to be dissolved in water. Some of them were not even water soluble. Lucas chose which medications to prescribe based on their anticipated reimbursement amount – not medical necessity. The billing code determined the treatment, not the patients condition. Lucas received 4 years in federal prison.

The Foot Bath Scheme

Heres the uncomfortable truth about foot bath billing schemes. The DOJ is systematicaly targeting podiatrists who prescribe medications that dont qualify as medically necessary – and the foot bath schemes reveal how reimbursement-driven prescribing creates criminal exposure.

Lucas chose medications by reimbursement amount, not medical necessity. The Tennessee podiatrist owned a clinic and two pharmacies. He regularly prescribed antibiotic and antifungal drugs to be mixed into water for foot soaks. The drugs included capsules that werent meant to be dissolved. Some werent even water soluble. From 2018 through 2021, Lucas caused his pharmacies to submit nearly $4 million in claims for foot bath medications that were not medically necessary. A federal jury convicted him on five counts of healthcare fraud.

Williams faced over $11 million in fraud allegations. The Mississippi podiatrist was charged with prescribing medically unnecessary foot bath medications AND ordering medically unnecessary molecular diagnostic testing – some of it in exchange for kickbacks and bribes. Between 2016 and 2021, Williams allegedly caused over $4.9 million in false claims for foot bath medications. He also allegedly caused over $6.4 million in false claims for unnecessary lab testing. The kickback arrangement compounded the exposure.

Lund maximized reimbursements regardless of patient need. The Mississippi podiatrist prescribed foot bath medications to maximize payments from Medicare and TRICARE, not becuase patients needed them. From 2020 through 2022, Lund caused over $1.4 million in claims for unnecessary foot bath medications and diagnostic testing. Medicare and TRICARE reimbursed over $700,000.

Think about what this means for your podiatry practice. If your prescribing decisions are influenced by which medications generate higher reimbursements, thats not aggressive billing. Thats healthcare fraud. The medication selection that seemed like smart business practice becomes the evidence that proves criminal intent.

The Nail Debridement Trap

Heres something about podiatry Medicare fraud that catches even well-meaning practitioners. The distinction between routine foot care and medically necessary nail debridement is the difference between a non-covered service and a covered one – and billing the wrong code is fraud.

Thomas billed nail debridement when he merely trimmed toenails. The Colorado podiatrist was sentenced to 6 months in federal prison. Toenail trimming is not covered by Medicare. Nail debridement is covered – but only if specific clinical criteria are met. Thomas created medical records that falsely reported clinical evidence that would justify coverage. He didnt actualy find the reported clinical evidence. He fraudulently submitted nail debridement claims to Medicare when he merely trimmed toenails.

Edwards falsely represented that nail debridement was performed. The New York podiatrist admitted he performed routine foot care services that werent covered by insurers, then falsely represented that nail debridement services were performed. He paid $410,000 to resolve his civil liability under the False Claims Act.

The clinical criteria distinction determines everything. Nail debridement requires documented clinical evidence showing the patient meets specific medical necessity requirements. Merely trimming toenails – even if the patient has diabetes or vascular disease – does not automatically qualify. If your documentation claims clinical findings you didnt actualy observe, every claim is false.

49% of routine foot care claims did not comply with Medicare requirements. A December 2024 OIG audit examined 100 sampled claims. Nearly half failed to meet Medicare requirements. Based on that sample, approximately $4.4 million in routine foot care claims did not comply. The audit recommended additional oversight. That oversight means more scrutiny of your claims.

The Skin Substitute Fraud

Heres something about podiatry Medicare fraud that reveals a massive new enforcement target. Skin substitute billing has exploded – and so have the fraud prosecutions.

Jenson applied skin substitutes to patients who did not have wounds. The Houston podiatrist is charged with $45 million in healthcare fraud. The allegations state he applied bioengineered skin substitutes to patients who didnt have wounds – sometimes telling patients the treatments were “stem cells” used to treat body pain or swelling. From 2022 to 2024, his business billed over $90 million in claims and was reimbursed more then $45 million. When warned about billing practices in February 2023, they continued anyway.

Ruiz allegedly had an unlicensed person performing procedures. The Fresno County podiatrist was indicted along with a sales rep who patients called “Dr. Gabe” – despite having no license to perform medical procedures. The government paid millions based on claims that falsely stated Ruiz performed treatments that were actualy performed by the unlicensed sales rep.

The kickback arrangements compound the exposure. Skin substitute sales reps often have financial arrangements with podiatrists. If payments are tied to patient volume or specific product usage, those arrangements may violate the Anti-Kickback Statute. Every claim submitted based on a kickback referral is a false claim.

Common fraud patterns in skin substitute billing. Inflating billing codes to claim larger-sized grafts were used. Submitting claims for services never performed. Allowing uncredentialed providers to perform procedures using another doctors National Provider Identifier. The billing patterns that seem profitable become the evidence that proves fraud.

The Routine Foot Care Problem

Heres the irony that should terrify every podiatrist billing Medicare. Medicare does NOT cover routine foot care – yet podiatrists bill routine foot care services constanty and expect Medicare to pay.

Medicare excludes routine foot care from coverage. Nail trimming, corn removal, callus removal – these are not covered services. An exception exists if the patient has a systemic condition (like diabetes or peripheral vascular disease) AND meets specific clinical criteria. The systemic condition alone is not sufficient. The clinical criteria must also be documented.

The Wessel case demonstrates the upcoding pattern. The Arizona podiatrist provided routine podiatry care at assisted living facilities. He fraudulently billed Medicare for more complex and significantly more expensive services that he did not perform. He falsely documented patients medical records with ailments they did not have and with care he did not provide. He was ordered to pay $965,985 in restitution.

False documentation creates federal liability. If your documenting clinical findings that would justify coverage when those findings dont exist, thats not aggressive documentation. Thats fraud. The medical record that should protect you becomes the evidence that convicts you.

The Cases That Show What Happens

If you think federal podiatry Medicare fraud prosecutions are theoretical, look at what actualy happens to podiatrists when these schemes collapse.

Kenneth Mitchell received 7 years in federal prison. The Michigan podiatrist had already been suspended by Medicare for suspicious billing practices. He continued billing under a false identity, submitting almost $2 million in false claims. He falsified records and committed identity theft. Seven years in federal prison for refusing to accept that Medicare had already caught him once.

Nathan Lucas received 4 years in federal prison. The Tennessee podiatrist operated the foot bath scheme from 2018 through 2021. He submitted nearly $4 million in claims for medications that werent medically necessary. A federal jury convicted him on five counts of healthcare fraud. He was also ordered to pay restitution.

Brian Carpenter received 45 months in federal prison. The Texas podiatrist signed prescriptions for TRICARE beneficiaries whom he never spoke to, examined, or treated. The compounded creams were medically unnecessary and procured through kickbacks. He was ordered to pay over $7 million in restitution. His patient recruiter co-defendant received 60 months.

Michael Thomas received 6 months in federal prison. The Colorado podiatrist merely trimmed toenails but billed Medicare for nail debridement. He created false medical records claiming clinical evidence that didnt exist. Even a relatively short sentence means federal prison time, a $20,000 fine, $40,460 in restitution, and two years of supervised release.

David Jenson faces 14 counts of healthcare fraud. The Houston podiatrist is charged with $45 million in skin substitute fraud. He allegedly applied products to patients who didnt have wounds. He allegedly continued fraudulent billing after being warned. Each count of healthcare fraud carries up to 10 years.

Heres the uncomfortable truth about podiatry fraud prosecutions. When federal investigators examine your billing patterns, they compare your documentation to what you actualy did. They interview patients. They analyze whether your prescribing decisions were driven by medical necessity or reimbursement optimization. The gap between billing codes and clinical reality becomes the evidence that convicts you.

These arnt unusual cases. They represent standard enforcement outcomes. The sentences reach 7 years. The restitution reaches millions. The practices that seemed profitable collapse when investigation begins.

How Podiatry Investigations Begin

Heres something about how these cases develop that should concern every podiatrist. Investigations often begin long before anyone contacts you.

Billing patterns trigger Medicare audit. If your practice bills significantly more nail debridement codes then similar providers, thats flagged. If your skin substitute billing volumes spike suddenly, thats flagged. If your foot bath medication prescribing generates unusualy high pharmacy reimbursements, thats flagged. Medicare data analytics identify statistical outliers. Outliers trigger investigation.

OIG audits identify compliance failures. The December 2024 audit found 49% of routine foot care claims non-compliant. Those audits lead to targeted reviews of individual providers. If your claims are among those selected for review, auditors compare your documentation to Medicare requirements. Failures become referrals.

Whistleblowers file qui tam lawsuits. Employees who witness billing fraud can file False Claims Act lawsuits and receive 15-30% of any recovery. That medical assistant who questioned your documentation. That billing staff member who refused to submit claims they knew were false. They can become government informants with financial incentive to expose everything.

Pharmacy data reveals prescribing patterns. When you prescribe medications, pharmacies bill Medicare or Medicaid. That billing data is analyzed. If your prescribing patterns suggest medications selected by reimbursement rather then medical necessity, the data reveals it. Lucas was caught becuase his pharmacy billing showed the pattern.

Product manufacturers and sales reps cooperate. When skin substitute companies face investigation, they produce records. Sales rep communications. Order histories. Kickback arrangements. The company that supplied your products may provide the evidence that proves your fraud.

What You Cannot Do When Investigated

Heres what people do when they learn about podiatry fraud investigations. They panic. They try to fix things. They make decisions that create additional criminal exposure.

Do NOT destroy or alter patient records. Medical documentation, billing files, prescription records, pharmacy communications. Destroying any of this is obstruction of justice. The government probly already has copies through Medicare claims data and records from pharmacies and suppliers. Destruction proves consciousness of guilt.

Do NOT backdate clinical documentation. If your records dont support the billing, your natural instinct is to add documentation showing clinical findings. Dont. Backdating records is additional fraud. Document creation dates can be forensicaly determined. The cover-up becomes additional charges.

Do NOT contact sales reps or suppliers to coordinate stories. If kickback arrangements exist, your natural instinct is to talk to those involved. Dont. They may already be cooperating with the government. Your conversation could be recorded. Coordination is witness tampering.

Do NOT assume the audit will resolve quietly. Podiatrists often think Medicare audits are routine billing disputes. By the time federal investigators contact you, the audit phase is over. They have evidence. They have prescribing patterns. They have patient interviews. You need an attorney before you say anything.

The False Claims Math

Heres something about podiatry Medicare fraud that exponentialy increases legal exposure. False Claims Act penalties apply per claim – and every patient visit is a seperate claim.

How the multiplier works. Each false claim carries penalties of up to $27,894. A podiatrist seeing 25 patients per day creates 25 potential false claims per day. Over a year, thats over 6,000 claims. At maximum penalties, thats theoretical exposure exceeding $167 million from False Claims Act liability alone.

Healthcare fraud adds criminal exposure. 18 U.S.C. 1347 provides up to 10 years imprisonment per count of healthcare fraud. Wire fraud adds up to 20 years per count. Anti-Kickback violations add up to 10 years per count plus $100,000 fines. The civil penalties stack on top of criminal sentences.

Treble damages multiply everything. False Claims Act provides for treble damages – three times the amount defrauded. If your billing fraud cost Medicare $1 million, treble damages equals $3 million. Plus per-claim penalties. Plus criminal fines. Plus restitution. The Jenson scheme allegedly defrauded Medicare of $45 million – treble damages would exceed $135 million.

Mandatory exclusion from federal healthcare programs. Conviction for healthcare fraud triggers mandatory exclusion from Medicare and Medicaid. You cannot bill federal programs. You cannot work for employers who bill federal programs. Your career as a podiatrist treating Medicare patients is over.

Civil monetary penalties compound exposure. The Office of Inspector General can pursue civil penalties seperate from criminal prosecution. Up to $100,000 per kickback under the Civil Monetary Penalties Law. Plus treble damages. Plus permanent exclusion. Even if you avoid prison, the civil liability can bankrupt you.

Corporate integrity agreements impose ongoing monitoring. Settlement often requires a 5-year corporate integrity agreement. Quarterly reporting to OIG. Independent review organization audits. Compliance program requirements. Annual certifications by the podiatrist personally. The settlement resolves past liability but creates compliance burdens that last for years. Violation triggers additional penalties and potentialy exclusion from federal programs.

What You Should Do Right Now

If federal investigators have contacted you about podiatry Medicare billing, or if your billing practices might trigger scrutiny, heres exactly what you should do:

Contact a federal healthcare fraud defense attorney immediatly. Not a general business lawyer. Not your malpractice carrier. Someone who specificaly handles federal healthcare fraud cases and understands Medicare podiatry billing prosecution.

Do NOT speak to investigators without counsel. Federal agents may approach you or your staff for “voluntary” interviews. There is nothing voluntary about it. Anything said can be used to build the case against you. Politely decline and contact an attorney immediatly.

Preserve all documentation exactly as it is. Patient records, clinical notes, billing files, prescription records, pharmacy communications, supplier agreements. Do not alter, destroy, or organize anything. Document preservation is critical.

Identify all potentially problematic billing patterns. Routine foot care billed with questionable clinical documentation. Skin substitute applications that may lack medical necessity. Prescribing patterns influenced by reimbursement rather then patient need. Your attorney needs to understand the full scope.

Do NOT discuss the investigation with sales reps, pharmacies, or suppliers. Anyone you talk to can be compelled to testify. They may already be cooperating with the government. Only attorney-client communications are protected.

Todd Spodek tells every podiatrist in this situation the same thing: federal podiatry Medicare fraud investigations are serious criminal matters. Kenneth Mitchell got 7 years for billing under a false identity. Nathan Lucas got 4 years for foot bath fraud. Your response in the next few days could determine wheather this becomes a matter that resolves favorably – or federal charges that destroy your practice and your freedom.

Call Spodek Law Group at 212-300-5196. Before you speak to federal investigators. Before you make decisions that create additional criminal exposure. Before a billing practice becomes a federal fraud prosecution.

Federal podiatry Medicare fraud is an enforcement priority. The DOJ is actively targeting foot bath schemes and skin substitute fraud specificaly. The sentences reach 7 years in federal prison. The restitution reaches millions. What you do right now matters enormosly.