A Perry County physician convicted of defrauding taxpayer-funded health programs and of improperly prescribing pain pills in an area awash in drug problems should serve 15 years in prison, a federal judge ruled Thursday.
James Alvin “Ace” Chaney, 52, was convicted on more than 150 charges that included improper prescribing and billing Medicare and Medicaid for unnecessary tests between March 2006 and October 2014.
Chaney’s actions “perpetuated so many addictions and so much damage to our community,” U.S. District Judge Gregory F. Van Tatenhove said in sentencing Chaney.
Chaney’s wife, Lesa, 52, was convicted with him. Van Tatenhove sentenced her to six years and eight months in prison.
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The two could be ordered to pay more than $12 million in restitution, though Ace Chaney’s attorney, Christy Love, said he has no assets.
The restitution amount will be determined later.
Chaney was the primary doctor at a facility he owned in Hazard called Ace Clinique of Medicine. His wife was listed as president of the clinic.
Love urged Van Tatenhove to sentence Chaney to no more than 10 years in prison, arguing that he was a caring physician who provided high-quality care to patients.
Lesa Chaney’s attorney, Robert L. Abell, said she is a loving mother who helped with school, church and community projects. He sought a three-year sentence for her, saying it’s critical for her to be able to help care for her two young daughters. The couple’s oldest daughter is raising her sisters.
However, prosecutors argued that Ace Chaney was driven more by pursuit of profit than concern for patients.
One witness involved in the clinic early on described Chaney’s plan as “starting from your cash register backwards, instead of your patients forward,” Assistant U.S. Attorney Paul McCaffrey said in a court motion.
Assistant U.S. Attorney Roger West said in a motion that Ace Chaney was responsible for distributing millions of pain pills in the time the clinic was open.
The clinic booked multiple patients for the same time slots, and Chaney signed prescriptions for others at the clinic to give patients while he was out, pushed workers to move more patients through the clinic and billed health programs for unnecessary tests, West said in court.
“From the start to the finish, these defendants were driven to create as much profit as possible,” West said. “This was a taxpayer-funded medical fraud.”
The clinic billed Medicare and Medicaid a total of $87.9 million during the conspiracy, and the programs paid a total of $21.1 million to the clinic or to other providers based on Chaney’s referrals, according to a prosecution motion.
In addition to the health fraud, Chaney’s improper prescribing worsened the area’s drug problem, West said.
“The damage done to southeastern Kentucky is not measurable,” he said.
West urged life sentences for Ace and Lesa Chaney. That was the potential sentence under advisory federal guidelines.
However, Van Tatenhove said life sentences were not appropriate.
Van Tatenhove said Chaney’s clinic provided legitimate medical care to many patients, though he ruled that 60 percent of the billing submitted to health programs involved fraud.
Defense attorneys said both Ace and Lesa Chaney will appeal their convictions. The two argue there was not sufficient evidence to support a conviction.
The Chaneys will have to serve at least 85 percent of their sentences if the convictions and sentences are upheld on appeal.
Ace Chaney has been jailed since April 2016. Lesa Chaney reported to jail in July 2016.