Late Mountain Home Doctor May Have Crafted Largest Medicare Fraud in State's History: $14.7M

by Mark Friedman  on Monday, Oct. 14, 2013 12:00 am  

If Dr. Stacey M. Johnson of Mountain Home had not died earlier this year at 63, he likely would have been charged with overbilling Medicare by $14.7 million, according to a criminal investigator’s affidavit that was recently made public.

Johnson’s medical career ended in 2009 when the Arkansas State Medical Board pulled his license for recklessly running too many tests on patients. Now the U.S. Attorney’s Office for the Western District of Arkansas is in the process of recovering money from what may be the largest Medicare fraud in the state’s history.

On Sept. 20, the U.S. Attorney’s Office filed a civil forfeiture lawsuit in an attempt to seize Johnson’s ex-wife’s Mountain Home mansion, which prosecutors said was paid for with proceeds from the Medicare fraud. Johnson’s ex-wife, Cynthia Johnson, paid $600,000 to settle the lawsuit and keep the property. The case was closed Oct. 4.

Cynthia Johnson told Arkansas Business last week that she had been given immunity from criminal prosecution and was scheduled to meet with federal investigators on Oct. 10.

She said she didn’t believe her former husband committed Medicare fraud.

“I worked in the office for 28 years with him, and he did not overbill Medicare,” she said. “He didn’t even pay attention to what was being billed. He was simply the physician and he did what he felt was right for the patients.”

Others disagree.

Conner Eldridge, U.S. attorney for the Western District of Arkansas, told Arkansas Business last week that recovering more assets is “an ongoing effort.”

“We are serious about trying to do all we can to locate those funds or assets,” he said. “There are a number of assets that we’re taking a look at.”

He wouldn’t say whether anyone would be charged. “It’s an ongoing investigation,” he said.

Dr. Johnson was allowed to continue practicing despite signs and allegations of over-testing dating back for years.

“It’s a serious Medicare fraud case,” said Eldridge, who was appointed U.S. attorney at the end of 2010. “So when you look at the amounts of overbilling and the amounts of money that was sought and obtained for Medicare for tests that were not medically necessary, it’s pretty astounding.”



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