A former Georgia insurance commissioner has pleaded guilty to federal charges related to a scheme to defraud major healthcare providers with unnecessary medical tests.
In federal court on Friday, John W. Oxedine pleaded guilty to conspiracy to commit health care fraud.
According to the indictment, while he was working as a private attorney, Oxendine conspired to provide fraudulent insurance claims to Aetna, Blue Cross Blue Shield, United Healthcare, and other healthcare providers for medically unnecessary testing.
The indictment alleged physicians associated with the ENT practice of Dr. Jeffrey Gallups were pressured to order medically unnecessary pharmacogenetic, molecular genetic, and toxicology testing from a testing lab in Texas called Next Health.
Federal prosecutors said as part of the scheme, Next Health, Oxendine, and Gallups had an agreement where the doctor would receive a kickback of 50% of the net profit for eligible specimens submitted by his practice for testing. Officials say Next Health was paid almost $700,000 from insurance companies. Some patients were also charged for the tests, and officials say the bills could be as high as $18,000.
To hide the kickbacks, officials say the payments were made from Next Health to Oxendine’s insurance consultant business. Oxendine then reportedly kept part of the kickback money and used a portion to pay debts to Gallups.
John Oxendine, as the former state-wide insurance commissioner, knew the importance of honest dealings between doctors and insurance companies, said U.S. Attorney Ryan K. Buchanan. But for personal profit he willfully conspired with a physician to order hundreds of unnecessary lab tests, costing hundreds of thousands of dollars. He will now be held accountable for violating the public’s trust.
With this guilty plea, Oxendine is set to be sentenced by a federal judge on July 12.
The indictment is the latest blow against Oxendine, who was once seen as a rising star in Georgia politics.
He was in his 30s when he burst onto the Georgia political scene.
Oxendine was elected to four consecutive terms as Georgia’s Fire and Insurance Commissioner, serving in the position from 1995 to 2011.
In 2010, Oxendine entered a crowded race for the Republican nomination for governor that was eventually won by then-Congressman Nathan Deal. Oxendine finished back in the pack.
