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Physical therapy billing fraud case settled

Thu., Nov. 24, 2011

Man agrees to restitution, loss of license

A Spokane physical therapist has escaped a 52-count felony case that accused him of overbilling the state for patient care.

The Spokane Superior Court case filed in 2009 against Patrick Schmidt of Star Physical Therapy ended with a fizzle last week after he paid about $22,400 in restitution and agreed to 240 hours of community service as part of a plea agreement.

Schmidt also agreed to an action that will result in the loss of his license for up to five years, according to court records.

Felony convictions could have resulted in Schmidt facing prison time and tens of thousands of dollars in fines.

Though state officials declared the case a successful prosecution of fraud, Schmidt’s attorney blunted such assertions.

Defense lawyer Carl Oreskovich pointed to the results of the case that began in May 2009 as a whistle-blower action. An investigation led to 52 felony charges of theft and falsifying records. More than two years later, this August , Schmidt entered an Alford plea on two misdemeanors. The plea enabled him to maintain his innocence while acknowledging that he may have been convicted at trial.

The case boiled down to an interpretation of billing codes, Oreskovich said.

Schmidt maintained he could bill for the services of an athletic trainer working on patients under his supervision. Officials at Labor and Industries disagreed.

Oreskovich said inconsistencies with code interpretation lead to many medical providers being prosecuted.

Labor and Industries characterized the case as a victory against fraud. In a blog post, an L&I official noted: “Schmidt created fictional chart notes for clients who missed an appointment, so L&I could be billed for services that couldn’t possibly have been rendered. It was clear that Schmidt had submitted at least 40 false invoices to L&I.”

The Board of Physical Therapy charged Schmidt with unprofessional conduct – citing the criminal prosecution and plea deal as evidence that he “allegedly engaged in daily and systemic overbilling, upcoding, and billing for services not provided.”

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