A 42-year-old Sebastian County man has been charged with health care fraud in connection with an alleged scheme to defraud the federal government of more than $88 million.
Billy Joe Taylor, 42, of Lavaca, is the owner and operator of Vitas Laboratories LLC of Barling (Sebastian County) and Beach Tox LLC of Torrance, California. He allegedly used access to patient and medical provider information from previous lab testing orders to file phony claims for tests, including COVID-19 tests, that were never ordered or performed, according to a news release from the U.S. Department of Justice.
More than $42 million in false and fraudulent claims came during COVID, the news release said. The criminal complaint was filed Friday and unsealed Tuesday. Taylor was arrested Wednesday and released on bond.
“These fraudulent Medicare claims for the lab tests performed after beneficiaries had died and for lab tests never ordered by the medical providers or performed for the patients listed on the claims,” said Matthew Ferguson, a special agent with the FBI, in a civil court filing related to the case.
He said the scheme worked this way: Taylor would establish or acquire control of clinical labs, allowing him and unidentified co-conspirators to get information about medical providers, patients and lab tests.
That information would then be used to file Medicare claims for tests that were never done.
The fraudulent claims included about $1.9 million in claims for lab tests purportedly performed for one beneficiary after the patient’s death, Ferguson wrote.
In January 2017, Taylor created Vitas as a new clinical lab. At the end of February 2020, Taylor and an unidentified “individual A” acquired ownership and control of Beach Tox, the complaint said.
From March 9, 2020, through Feb. 17, 2021, Beach Tox filed more than $65 million in Medicare claims and was paid about $17.8 million. Medicare records also show that Beach Tox continued to file Medicare claims in March and April. “Beach Tox had no access to working laboratory equipment during the time period of the COVID-19 public health emergency,” the criminal filing said.
“There is also probable cause to believe that in 2018 and 2019, Billy Taylor and others engaged in a conspiracy and scheme to defraud Blue Cross,” Ferguson wrote in the civil filing, but didn’t identify the specific Blue Cross & Blue Shield insurance company and the carrier isn’t mentioned in the criminal complaint.
On several occasions, Taylor and his co-conspirators used information from legitimate lab orders submitted to a lab he controlled as the basis for the fraudulent claims, Ferguson wrote. “Blue Cross paid more than $10 million on these fraudulent claims.”
Taylor’s case was filed in U.S. District Court for the Western District of Arkansas and is being prosecuted by Senior Litigation Counsel James Hayes and Trial Attorney D. Keith Clouser of the National Rapid Response Strike Force and Assistant U.S. Attorney Kenneth Elser of the U.S. Attorney’s Office for the Western District.
Taylor is represented by Erin M. Ferber and Robert N. Nicholson of Nicholson & Eastin LLP of Fort Lauderdale, Florida. They didn’t immediately respond to an email for comment.