Ex-MLB Pitcher Hit With Prison Sentence Over Healthcare Fraud

A former Major League Baseball pitcher was recently sentenced in a Florida federal court to forty-six months in prison for his involvement in a multi-million dollar healthcare fraud. Justin Wayne, who last played for the Florida Marlins, along with his brother and a medical lab company the two created, were involved in a scheme that paid kickbacks to substance abuse treatment centers in exchange for providing their patients with medically unnecessary urinalysis tests.

Smart Lab, LLC, the Palm Beach Gardens, Florida-based lab company started and owned by Wayne and his brother, H. Hamilton Wayne, was initially set up to perform confirmatory urinalysis testing. However, the Waynes concocted a scheme to file fraudulent insurance claim forms and defraud healthcare benefit programs, and set up bank accounts specifically to receive the insurance payments for medically unnecessary tests and to pay kickbacks and bribes to various treatment centers and individuals that referred urine samples to Smart Lab.

Federal prosecutors say that the Waynes had employment agreements in place under which Hamilton Wayne and other co-conspirators would solicit urine samples from substance abuse treatment centers in order to submit them to Smart Lab for the costly testing. Smart Lab then would pay back a portion of the insurance reimbursement to the co-conspirators under the guise of sales commissions, but with full knowledge that the payments were actually going to the owners, operators or clinicians at the treatment centers who made the referrals.

As evidence of the scheme, prosecutors say that the co-conspirator treatment centers required their insured patients to submit to the urinalysis testing three times a week. Furthermore, the Waynes and Smart Lab did not collect mandatory co-payments, deductibles and co-insurance from the patients, which likely would have discouraged or prevented the patients from submitting to the testing, and also acted to conceal the non-collection of these sums.

The three defendants, each pleading guilty to a single count of conspiracy to commit healthcare fraud, were ordered to repay just under $2.9 million in restitution to their victims.  Hamilton Wayne, Smart Lab’s CEO during the time period at issue, was also ordered to repay $954,344 to the federal Tricare program stemming from his role in a separate fraud matter involving a company named RX to You. Additionally, both Waynes were ordered to pay fines; Hamilton was ordered to pay a $50,000 fine, while Justin was ordered to pay a $20,000 fine.

The federal anti-kickback and Stark laws are unforgiving and complex, leaving no room for errors in judgment and certainly no room for knowingly violating the statutes. As such, it is of dire importance to those in the healthcare field to familiarize themselves with these statutes and to consult an experienced healthcare attorney with any questions about the legality of their business relationships in the field.