Tuesday, November 4, 2014

Another Criminal Case Involving Compounded Medications: Doctor arrested on 31 fraud related felonies-- Physicians RX Network alleged to have over billed insurance companies for prescription drug compounds

Castro Valley Orthopedist Arrested on 31 Fraud Related Felonies
Tue, 28 Oct 2014 10:10:08 - Pacific Time
Castro Valley orthopedic surgeon, Douglas J. Abeles, M.D., surrendered on an arrest warrant obtained by the Alameda County District Attorney's Office for his role in an insurance fraud scheme occurring out of his East Bay business office. He has been charged with 31 felony offenses following an investigation that was conducted jointly by the Alameda County District Attorney's Office and the California Department of Insurance.

Medical Board records do not show any disciplinary actions against him and also do not reflect that he is board certified in any specialty. He currently has unfettered rights to practice medicine. According to his website drabeles.com, "Abeles specializes in Sports Medicine, Spine Surgery, and General Orthopaedics. He completed fellowships at Georgetown University-Virginia Sports Medicine Institute and also USC-Rancho Los Amigos Spine Surgery in 1995. His residency was completed in 1993 at the prestigious New York Medical College-Brooklyn-Queens (previously known as Catholic Medical Center). He also rotated on the spine and pediatric services at the Hospital for Joint Disease in 1992". 

The Criminal Complaint filed by authorities against Abeles and his office manager, Gabriela Cuevas, alleges that for several years he falsely and fraudulently billed insurance companies for medical services that were not provided. While Abeles, had an orthopedic medical practice in Castro Valley, he also owned and operated at least four medically-related businesses from an office located at the Castro Valley-Hayward border. These businesses included drug testing urine analysis for medical offices that contracted with him. It was through this business that he allegedly fraudulently billed insurance companies for lab reports.

Abeles allegedly formed Physicians RX Network, Inc. ("PRXN") in 2005 in a location other than his medical office. PRXN contracted with physicians in regards to the dispensing of prescribed drugs, including prescription compound creams, billing the insurance companies on behalf of the physicians for these drugs. In late 2010, Abeles went into the Urine Analysis ("UA") business, forming Redwood Laboratory Management, LP and Redwood Laboratory Associates, LLC ("RLM"). RLM contracted with physicians in regards to urine drug testing of patients and billing insurance companies on behalf of the physicians for this drug testing.PRXN and RLM operated in the same office and the two businesses overlapped and shared. In May of 2011, Abeles formed another business, PRXN Toxicology, LLC. 

Abeles hired Gregg Gorski to be a sales representative, Roxanne Cecot to be the billing supervisor and Larry Davis to be the Chief Operating Officer of PRXN. All three had complained about improprieties in PRXN billings, particularly about over-billing insurance companies for prescription drug compounds. Roxanne Cecot learned that Douglas Abeles told the receptionist at PRXN and another PRXN employee to over-ride the billing software at PRXN and manually increase the prices When Roxanne Cecot complained to Abe!es about the billing improprieties Abeles allegedly replied "Screw them until they catch on." Abeles allegedly sent an email that said "if any employee further implies any wrong doing to anyone they are to be let go immediately on grounds of insubordination and liable. We cannot operate a successful company with this kind of mutiny .... "'

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Press release


Doctor arrested for role in insurance fraud scheme

News: 2014 Press Release
For Release: October 27, 2014
Media Calls Only: 916-492-3566
Doctor arrested for role in insurance fraud scheme
OAKLAND, CA. - Alameda County District Attorney Nancy E. O'Malley announced today that a Castro Valley physician and surgeon, Douglas J. Abeles, M.D., surrendered on an arrest warrant obtained by the Alameda County District Attorney's Office for his role in an insurance fraud scheme occurring out of his East Bay business office. He has been charged with 31 felony offenses following an investigation that was conducted jointly by the Alameda County District Attorney's Office and the California Department of Insurance.
"Large insurance fraud schemes are often highly sophisticated," said District Attorney Nancy E. O'Malley. "This investigation required extensive and diligent investigative work, entailing the meticulous collection of evidence. I commend the Department of Insurance for its diligence in partnering with my Office on this investigation." 
The charges against Doctor Abeles and his office manager, Gabriela Cuevas, indicate that for several years he falsely and fraudulently billed insurance companies for medical services that were not provided. While Douglas Abeles, M.D., had an orthopedic medical practice in Castro Valley, Douglas J. Abeles M.D. & Associates, he also owned and operated at least four medically-related businesses from an office located at the Castro Valley-Hayward border. Gabriela Cuevas managed these businesses for Dr. Abeles. These businesses included drug testing urine analysis for medical offices that contracted with Dr. Abeles. It was through this business that the defendants allegedly fraudulently billed insurance companies for lab reports.
"This physician's systemic abuse of the medical services system inflates premiums for all Californians who eventually end up footing the bill for this type of fraud," said Insurance Commissioner Dave Jones. "Our detectives, investigators and law enforcement partners spend countless hours to root out those who abuse the insurance system for their own personal financial gain. The Alameda County DA's Office was an invaluable partner in moving this case forward."
Any medical professional or insurance company that believes it may have been a victim to this fraud is asked to contact the Alameda County District Attorney's Office at 510-383-8600.
Media Notes:
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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2013 the California Department of Insurance received more than 170,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

5 comments:

Unknown said...

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Unknown said...

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Unknown said...

With the advent of modern medicine and technology, there has been lot of innovations in the different fields of health care. One such important area is the orthopedics. It deals with the skeleton of the body- the part which makes the natural frame and foundation.See more at- Houston Orthopedic Doctors

Unknown said...


Pain management is the medical field that is involved with the management of short or long-term pain. Typically, these types of physicians and medical personnel will be employed at hospitals or clinics for the treatment of patients who have longer term problems after surgeries or other medical issues.
See more at- Houston Orthopedic Doctors

Unknown said...

With the advent of modern medicine and technology, there has been lot of innovations in the different fields of health care. One such important area is the orthopedics. It deals with the skeleton of the body- the part which makes the natural frame and foundation.See more at:-Houston Orthopedic Doctors