Government Recovers $4M in Late Mountain Home Doctor's Medicare Fraud Case

Government Recovers $4M in Late Mountain Home Doctor's Medicare Fraud Case
The late Dr. Stacey Johnson of Mountain Home (inset) once owned and practiced at this medical building, where the alleged Medicare fraud occurred. (Kevin Pieper)

More than $4 million in property has been recovered as result of a claim filed against the probate estate of Dr. Stacey M. Johnson of Mountain Home and a civil forfeiture action.

U.S. Attorney Conner Eldridge says an order filed Monday directed that $3.4 million be paid to the United States through assets of Johnson's estate. 

Arkansas Business' Mark Friedman first brought you the story of Johnson's $14.7 million Medicare fraud in October. Johnson died March 5, 2013, of natural causes. His medical license was pulled by the Arkansas State Medical Board in 2009 for recklessly running too many tests on patients.

According to an affidavit filed with the civil forfeiture, Johnson was a licensed cardiologist from November 1980 until December 2009, and owned and operated the Physicians' Medical Center of the Ozarks, and Physicians' Surgical Center of the Ozarks. Both were located in Mountain Home.

Investigators began looking into Johnson's practice in 2006 and discovered a substantial increase in billings to Medicare between 2001 and 2006. 

The investigation determined Johnson ordered several tests for his patients that were not medically supported and ordered duplicate tests.

After Johnson's death, his estate was valued at $3.5 million. The U.S. Attorney's Office filed a claim, on behalf of the United States Department of Health and Human Services, against the estate in excess of $14.7 million for Medicare overpayment.

The U.S. will receive $2.5 million from a promissory note owed to Johnson, in addition to the proceeds of five properties owned by the late doctor. The properties are valued at $980,000.

Last year, the U.S. Attorney's Office filed a civil forfeiture lawsuit in an effort to seize Johnson's ex-wife's Mountain Home mansion, which prosecutors say was paid for with money 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 in October.

Eldridge said a Medicare fraud of this magnitude has an effect on all taxpayers in Arkansas.

"This doctor built his fortune by scheming to defraud a healthcare program that was designed to benefit some of the most vulnerable people in our society, the elderly and young people facing end of life illnesses," Eldridge said in a news release.