‘Double dipping scheme.’ Kentucky clinic owner sentenced to 10-plus years for fraud
A clinic owner in Eastern Kentucky who boosted profits through illegal cash charges to people struggling with addiction has been sentenced to 10 years and five months in federal prison.
Eugene Sisco III, of Pikeville, also was ordered to pay $5.7 million in restitution to Medicaid, Medicare an victims of the scheme, according to court documents.
A jury convicted Sisco, 36, of charging $200 to $300 a month to people seeking drug treatment when the service should have been free to most of them through Medicaid.
Victims desperate not to relapse said the charges caused them to fall behind on rent and get evicted; miss car payments and lose vehicles; sell possessions; and suffer tremendous emotional stress, Assistant U.S. Attorney Paul McCaffrey said in a sentencing memorandum.
Sisco “chose to capitalize on their need and desperation and made what was a challenge for many of them even harder,” the prosecutor wrote, said McCaffrey, who prosecuted.
Jurors convicted Sisco on one charge of wire fraud and one charge of health care fraud. U.S. District Judge Robert E. Wier sentenced him Tuesday in Pikeville.
Wier also denied a request to give Sisco a new trial or to acquit him notwithstanding the jury’s verdict.
Sisco’s attorneys argued that the government failed to prove the charges, but Wier said there was ample evidence to support the conviction.
Wier also turned down a request for Sisco to remain free on bond pending a possible appeal. He ordered Sisco taken into custody Tuesday, the court record shows.
Sisco operated clinics where people could get Suboxone, a drug that reduces cravings for opioids such as oxycodone pain pills.
The clinics did business under the names Renew Addiction Treatment or BHP. They operated at various times in Pikeville, Prestonsburg, Harlan, Whitesburg and Ivel, according to court records.
Sisco also had a drug-testing lab called Toxperts.
Sisco carried out what the prosecutor called a “double dipping scheme,” charging clients a fee for services that Medicaid covered and then billing Medicaid for the services.
That went on between at least May 2016 and October 2019, according to the court record.
Evidence showed that the cash payments from patients totaled about $5 million during that time, most of it from Medicaid patients who shouldn’t have had to pay anything, according to a release from U.S. Attorney Carlton Shier IV.
Sisco also required clients of his clinics to submit urine samples to be tested at his lab.
Such tests are used to help make sure people are not abusing drugs while in treatment, or not selling Suboxone they’ve received at a clinic.
In Sisco’s case, however, doctors had not ordered the tests and they were not medically necessary because the samples had already been screened at the clinics, according to the court record.
Sisco’s attorneys, Jonah Stevens and Justin Hamilton, sought probation for him, citing the humiliation of the conviction, the loss of his business and his contrition.
Sisco was probably naive in his interpretation of the law, and believed he could navigate complex Medicaid and Medicare reimbursement rules alone without advice from attorneys, his lawyers said in a sentencing memorandum.
“Being so young, and despite all the potential legal advice near to him, he became foolhardy in this aspect,” Sisco’s attorneys wrote.
However, McCaffrey said Sisco took advantage of vulnerable people, stealing from “drug-addicted, lower-income, struggling individuals who came to his clinics desperate for help.”
The people were “particularly susceptible to being tricked into paying cash for services covered by their insurance because they were desperate to receive Suboxone, and fearful of relapse,” McCaffrey said.
More than 1,500 people paid Sisco for services that should have been free.
The prosecutor also argued Sisco was well aware of his criminal conduct, concocting “elaborate lies” involving shell companies to conceal the thefts.
Wier said in a ruling that Sisco’s clinics provided a series of “inconsistent and false explanations” for the cash charges to patients.
Sisco will have to serve at least 85 percent of his sentence.
The FBI investigated the case along with Kentucky State Police and the Kentucky Attorney General’s Office of Medicaid Fraud and Abuse.
This story was originally published March 9, 2022 at 10:15 AM.
