Six Rio Grande Valley Doctors Agree to Pay Nearly $5 Million in False Claims Settlement

In a significant healthcare fraud settlement, six South Texas physicians and their medical practices have agreed to pay nearly $4.9 million to resolve allegations of submitting false claims to government healthcare programs. The settlement, announced by the U.S. Attorney’s Office for the Southern District of Texas, addresses claims that were either medically unnecessary or for services never provided.

The six physicians—Drs. Javier Cabello of San Benito, Ammar Halloum of Brownsville, Jamil Madi of Olmito, Jairo Rodriguez of Rancho Viejo, Ricardo Schwarcz of Weslaco, and Stanley Sy of Pharr—operated Benchmark Inpatient Services, doing business as Beyond Inpatient Services in Harlingen. Dr. Rodriguez additionally owned and operated Brownsville Pulmonary Center.

Federal investigators allege that between January 2020 and May 2023, during a period that overlapped with the COVID-19 pandemic, the doctors and their practices submitted fraudulent claims to Medicare, Medicaid, and TRICARE. The allegations specifically focus on improper billing for critical care services and pulmonary function testing.

According to authorities, the physicians billed for critical care that requires complex decision-making and at least 30 minutes of treatment for critically ill patients. However, medical records reportedly show the doctors were instead billing for stable patients, unnecessary follow-up visits, or in some cases, services that were never performed at all.

In the case of Brownsville Pulmonary Center and Dr. Rodriguez, investigators found additional improper billing for pulmonary function testing (PFT). These diagnostic tests, which measure lung function, are reimbursable by Medicare only when medically necessary to diagnose new respiratory symptoms or evaluate current treatments. The allegations state that the practice billed for routine testing that was unnecessary or for services never performed.

“This outcome emphasizes the Southern District of Texas’s commitment to vigorously investigate and disrupt civil health care fraud, wherever it may be,” said U.S. Attorney Alamdar S. Ganjei. “Our country’s most vulnerable deserve care based on their medical need, not on a doctor’s unscrupulous desire to line their own pockets.”

The fraudulent billing practices resulted in Medicare, Medicaid, and TRICARE paying substantially more than they should have for services that either didn’t meet reimbursement criteria or were never provided to patients.

This case highlights ongoing concerns about fraud in the healthcare system. The Centers for Medicare & Medicaid Services estimates that improper payments cost taxpayers billions annually. Healthcare fraud not only drains limited government resources but can also potentially harm patients through unnecessary procedures or neglect of appropriate care.

Jason E. Meadows, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General, emphasized the agency’s commitment to protecting patients and federal healthcare programs. “This settlement underscores our commitment to holding providers accountable when they submit claims for services that are not medically necessary or not actually provided.”

The investigation was conducted by multiple agencies, including the Department of Health and Human Services Office of Inspector General, the FBI, the Defense Criminal Investigative Service, and the Texas Attorney General’s Office Civil Medicaid Fraud Division.

FBI Acting Special Agent in Charge Alex Doran noted the seriousness of committing fraud during the COVID-19 pandemic, saying it “steals from taxpayers and exploits vulnerable patients.”

The settlement resulted from a qui tam or whistleblower complaint filed under the False Claims Act. This legislation allows private individuals to file lawsuits on behalf of the government against those who have defrauded federal programs. Whistleblowers can receive a portion of any recovered funds, creating an incentive for insiders to report fraud.

While the physicians and practices have agreed to the $4,855,844 payment, the settlement resolves only allegations, and there has been no determination of liability in the case. The identities of the whistleblower and the specific amount they may receive from the settlement were not disclosed in the announcement.

This case represents part of broader efforts by federal and state authorities to combat healthcare fraud, particularly in government programs serving vulnerable populations.