A federal grand jury in Nevada indicted a Henderson, Nev., physician on charges he orchestrated a $95 million scheme to defraud Medicare by billing for medically unnecessary amniotic wound treatments applied to elderly patients, the Justice Department announced.
Stephen Dubin, 74, sole owner of Dubin Medical Consultants, doing business as Wound MD, is charged with conspiracy to commit health care fraud and five counts of health care fraud. If convicted, he faces up to 10 years in prison on each count. The case marks the first charges announced in Nevada by the department’s National Fraud Enforcement Division since the formation of the West Coast Health Care Fraud Strike Force in April.
According to the indictment, Dubin caused Medicare to be billed more than $95 million for amniotic wound allografts he obtained through illegal kickbacks and bribes from two distributors, and Medicare paid out more than $54 million on the resulting claims. Prosecutors allege some of the kickback payments were disguised as legitimate “Rebate Agreements” that concealed the true, lower cost Dubin paid for the products, while he billed Medicare at full, undiscounted prices and kept the difference. The indictment also alleges he received kickbacks from one distributor routed through a shell company’s bank account.
Prosecutors allege Dubin and co-conspirators applied the allografts without regard to medical necessity — including to infected wounds, wounds not responding to the treatment, and wounds where required conservative care had not first been attempted — and in quantities exceeding what the wounds required, selecting products based on profit rather than patient need. Some of the patients were in hospice care, according to the indictment, which also alleges Dubin falsified medical records to make the treatments appear medically justified. Prosecutors say he used the proceeds to fund a lavish lifestyle, including having multiple yachts built for him.
Assistant Attorney General Colin M. McDonald of the department’s National Fraud Enforcement Division said the indictment “exposes a scheme driven by greed, not medicine.” First Assistant U.S. Attorney Sigal Chattah for the District of Nevada said the defendants “prioritized personal greed over patient care by weaponizing complex billing codes for advanced wound care products.”
The FBI, the Department of Health and Human Services Office of Inspector General, and the Defense Criminal Investigative Service are investigating the case. Trial attorneys Chris Wenger and Shane Butland of the Justice Department’s Fraud Section and Assistant U.S. Attorney Jessica Oliva for the District of Nevada are prosecuting it.
The charges are allegations, and Dubin is presumed innocent unless and until proven guilty.