ERIE, Pa. – A physical therapy practice in Erie County, Pennsylvania, and 20 people – 18 of them from northwestern Pennsylvania – have been indicted by a federal grand jury in Erie on charges of conspiracy to commit wire and health care fraud and health care fraud, Acting United States Attorney Stephen R. Kaufman announced today.
The two-count Indictment named the following individuals as defendants:
Aaron Wilhelm Hertel, of North East, Pennsylvania 16428
Michael Robert Brown, of Erie, Pennsylvania 16506
Sarah Elizabeth Bailey, of Erie, Pennsylvania 16506
Jessica Jeanne Morphy, of Erie, Pennsylvania 16505
Jacqueline Renee Exley, of Erie, Pennsylvania 16508
Julie Ann Johnson, of Erie, Pennsylvania 16506
Bobby Lee Rainey, of Erie, Pennsylvania 16505
Steve Michael Bauer, of Erie, Pennsylvania 16502
Austin John Dudenhoefer, of Erie, Pennsylvania 16509
Philip Dale Sorensen, Jr., of Erie, Pennsylvania 16509
Patricia Susan Berchtold, of Melbourne, Florida 32940
Jeremy Richard Bowes, of Erie, Pennsylvania 16506
Jennifer Marie Larmon, of Waterford, Pennsylvania 16441
Travis Walter Litz, of Erie, Pennsylvania 16508
Erin Marie Riffe, of Conneaut, Ohio 44030
Abigayle Jane Fachetti, of Erie, Pennsylvania 16511
Lori Lynn Goss, of Waterford, Pennsylvania 16441
Marissa Sue Hull, of Waterford, Pennsylvania 16441
Justin Charles Burger, of Erie, Pennsylvania 16508
Carl William Lewis, Jr., of Lake City, Pennsylvania 16423
The indictment also names Hertel & Brown Physical & Aquatic Therapy, main office located at 902 West Erie Plaza Drive, Erie, Pennsylvania 16505, as a defendant.
According to the Indictment presented to the court, the defendants conspired from January 2007 to October 2021 to commit wire fraud and health care fraud. The multi-faceted conspiracy had numerous components including:
a) Hertel & Brown Physical & Aquatic Therapy utilized unlicensed technicians to provide physical therapy treatment, including aquatic therapy, and billed that treatment as if performed by a licensed physical therapist or physical therapy assistant.
b) Unlicensed technicians at Hertel & Brown Physical & Aquatic Therapy were permitted and required to log into the treatment documentation system, WebPT, as a licensed physical therapist to facilitate documenting treatment as if performed by a licensed therapist.
c) Hertel & Brown Physical & Aquatic Therapy and its licensed employees regularly recorded and billed for treatment time in excess of actual treatment time spent with patients.
d) Hertel & Brown Physical & Aquatic Therapy and its licensed employees rarely if ever utilized group therapy codes when billing for treatment even when group billing codes were the only appropriate billing codes that could have been utilized.
e) Hertel & Brown Physical & Aquatic Therapy regularly billed treatment time using the name and credentials of a physical therapist who was on vacation and not working on the day in question.
f) Hertel & Brown Physical & Aquatic Therapy allowed physical therapy assistants and unlicensed personnel to treat patients with insurance that only reimbursed for treatment performed by a physical therapist. Then the practice and its employees covered up who actually treated the patient by removing the name of the actual person providing treatment from the treatment record.
g) Hertel & Brown Physical & Aquatic Therapy and some of its employees also manually changed the patient schedule after the fact to conceal that Medicare patients were scheduled at the same time as other patients. This was done to conceal that Medicare patients did not have one on one treatment with a physical therapist as billed by the practice and required by Medicare.
“The indictment alleges that essentially since Hertel & Brown opened in 2007, the defendants perpetrated a systematic and brazen fraud scheme that bilked insurance companies and the government of millions through blatantly false billings,” said U.S. Attorney Kaufman. “Addressing health care fraud is a top priority of our Office and of our federal, state and local law enforcement partners.”
“Those charged today were in the business to make a quick buck and in turn violated the very basic ethical and moral standards medical professionals are held to,” said FBI Pittsburgh Special Agent in Charge Mike Nordwall. “Taking short cuts, illegal and improper billings and elaborate health care fraud schemes all increase the cost of medical care. The FBI will continue to work with our state, local and federal partners to detect and hold accountable those who abuse our health care system and patients’ trust.”
“When individuals and entities engage in health care fraud schemes, they steal from taxpayers and undermine the safeguards intended to protect patients,” stated Special Agent in Charge Maureen R. Dixon of the U.S. Department of Health and Human Services Office of Inspector General. “Working with our law enforcement partners, we will continue to investigate health care fraud to protect the integrity of federal health care programs and the beneficiaries served by them.”
“Health care fraud takes away limited resources from some of our most vulnerable Pennsylvanians,” said Pennsylvania Attorney General Josh Shapiro. “My Office, as well as our local, state, and federal partners, are committed to stopping these bad actors and preventing them from undermining critical support that families across the Commonwealth rely on.”
“Today’s indictment charges the defendants with conspiring to fraudulently bill the government for healthcare services that were either not provided or not provided to standard,” said Special Agent in Charge Kim Lampkins with the Department of Veterans Affairs Office of Inspector General. “The VA OIG, along with our law enforcement partners, is dedicated to ensuring that our nation’s veterans receive only the highest quality health care for which they deserve.”
The law provides for a maximum total sentence of 30 years in prison, a fine of $500,000 or twice the pecuniary loss (whichever is greater), or both for each defendant and the business. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation (FBI), United States Department of Health and Human Services – Office of Inspector General (HHS-OIG), United States Department of Veteran’s Affairs – Office of Inspector General (VA-OIG), Defense Criminal Investigative Service (DCIS), the Pennsylvania Office of Attorney General – Medicaid Fraud Control and Abuse Unit, and the United States Office of Personnel Management – Office of Inspector General (OPM-OIG) conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
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