A former employee of a Hazard clinic pleaded guilty in a case in which federal authorities are seeking a $23 million judgment against a doctor accused of taking in that much through health care fraud and improper prescribing.
Gregory Hoskins was a physician assistant at Ace Clinique of Medicine, operated by Dr. James Alvin "Ace" Chaney and his wife, Lesa L. Chaney.
Hoskins said in a court document that when Chaney and his wife traveled, they would leave at the clinic prescription sheets which Ace Chaney had signed, but the sheets were otherwise blank.
Hoskins said he and others at the clinic would finish filling out the drug orders for patients while the Chaneys were gone.
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Hoskins said the purpose was to expedite giving prescriptions to the large number of patients at the clinic, which authorities have charged was a pill mill.
It was well-known to Hoskins and others that "a substantial portion of the patient population was not seeking legitimate medical treatment, but rather was addicted to controlled substances or was otherwise diverting the controlled substances for other illegal purposes," according to Hoskins' plea.
Hoskins, who pleaded guilty Thursday, faces up to five years in prison. He is to be sentenced in September.
Plea deals such as the one Hoskins signed often include a requirement to cooperate with authorities, including testifying against others if asked.
Hoskins was first indicted with Chaney and his wife. He was not included in a superseding indictment issued last month against the couple and the clinic.
That 269-count indictment alleged that between March 2006 and October 2014, Ace and Lesa Chaney and their business conspired to illegally dispense controlled substances.
The indictment included charges that Ace Chaney left signed prescriptions slips for pain pills at the clinic in June 2010 and had unauthorized people issue them while he was gone.
The indictment also alleges in separate counts that Chaney, his wife and the clinic conspired to illegally distribute drugs between November 2010 and October 2014, when state authorities issued an emergency order suspending Chaney's medical license after he was indicted.
The indictment also includes more than 150 counts of alleged health care fraud, as well as money-laundering and other charges.
A grand jury charged that Chaney took part in billing Medicaid and Medicare for tests such as drug screens and MRIs that were not necessary or were performed by unqualified employees, and submitted bills claiming Chaney had seen patients when he hadn't.
The indictment also alleged that Chaney directed employees to change the results of urine drug screens to falsely show that patients were taking drugs as directed, or to hide the fact that patients were using illicit substances.
Many of the health care fraud charges, but not all of them, named Lesa Chaney as well.
The most serious charges carry sentences of up to 20 years.
Chaney and his wife have strongly denied the charges.
Their attorneys said in one court motion that the allegations the couple operated a pill mill were based on rumor and speculation.
"Dr. Chaney stands behind each and every prescription he has written for a patient and behind his billing practices," one of his attorneys, Elizabeth Snow Hughes of Lexington, said Friday.
The indictment against the Chaneys and the clinic, which is closed, includes a forfeiture count under which the government seeks to take away the clinic, their house, several vehicles and an airplane.
It also seeks a judgment of $23.3 million, representing the gross proceeds from 2006 through 2014 of alleged illegal activities.