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Press Release

Co-Owner of Atlanta-Based Medical Clinic Chain and Hospital CEO Pleaded Guilty to Illegal Pay-for-Patient Conspiracy

For Immediate Release
Office of Public Affairs

A CEO of an Atlanta-area hospital and the co-owner and chief operating officer of an Atlanta-based medical clinic chain pleaded guilty in connection with the payment of illegal kickbacks to clinics in exchange for Medicaid patient referrals to hospitals in the Atlanta area and on Hilton Head Island, South Carolina.

Principal Deputy Assistant Attorney General Marshall L. Miller of the Justice Department’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia, Special Agent in Charge Derrick Jackson of the Atlanta Region of the Department of Health and Human Services Office of Inspector General (HHS-OIG) and Assistant Director in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement. The guilty pleas were entered by U.S. District Judge Amy Totenberg of the Northern District of Georgia.

“These medical executives enriched themselves by using uninsured pregnant women and newborn babies as commodities, whose health care could be bought and sold for kickbacks and bribes,” said Principal Deputy Assistant Attorney General Miller. “Unlawful payments for patient referrals can lead to increased Medicaid costs, corrupt medical decision-making, overutilization of medical services, and unfair competition – and most importantly, insufficient or inadequate care for patients. The Justice Department is committed to investigating and prosecuting those who illegally pay for patients.”

“Our federal health care programs depend on providers exercising independent judgment in the best interests of patients,” said U.S. Attorney Sally Quillian Yates. “These illegal referral arrangements resulted in women being steered to deliver their babies at hospitals on the basis of Clinica’s and the hospitals’ financial self-interest, regardless of whether it was in the women’s best interest.”

“It is outrageous that health care providers would scheme to refer uninsured mothers about to deliver their babies to hospitals based on a kickback agreement designed to boost profits rather than based on who would provide the best health care to the mothers and newborns,” said Special Agent in Charge Jackson. “Our agency is dedicated to unearthing such corrosive and illegal kickback schemes, which undermine the public’s trust in the medical profession,"

“Today’s guilty pleas will hold two individuals who were in positions of trust and authority accountable for their participation in a criminal scheme in which decisions on patient care were driven by illegal monetary gain instead of the patients’ best interest,” said Special Agent in Charge Johnson. “The FBI will continue to partner with HHS-OIG and the Department of Justice to ensure that the many facets of the health care industry operate as intended and are free from those who seek opportunity to illegally profit by manipulating federal programs designed to aid those in need.”

Tracey Cota, 50, pleaded guilty on Aug. 6, 2014, and Gary Lang, 58, pleaded guilty on Aug. 7, 2014. Both pleaded guilty to conspiracy to violate the Anti-Kickback Statute by paying and receiving illegal remuneration in exchange for Medicaid patient referrals to hospitals in the Atlanta area and on Hilton Head Island.

According to the charges and other information presented in court, Lang was the Chief Executive Officer of an Atlanta-area hospital that was enrolled as a provider in the Georgia Medicaid program. Cota was the co-owner and chief operating officer of Hispanic Medical Management, Inc. dba Clinica de la Mama (Clinica), a Georgia corporation that operated several medical clinics in the Atlanta area and on Hilton Head Island. These clinics specialized in providing prenatal care services to primarily undocumented Hispanic women. The women typically did not have medical insurance, and they were ineligible for Medicaid because of their immigration status. Georgia and South Carolina Medicaid, however, covered and paid certain costs associated with the women’s labor and delivery and the care of their newborns at hospitals, as well as the professional fees of the physicians providing labor and delivery services.

Between July 2000 and July 2012, Cota conspired with Lang and other executives from Atlanta-area hospitals and from a hospital on Hilton Head Island to pay kickbacks to Clinica for the referral of Clinica’s patients to the hospitals. The hospitals disguised the kickbacks using contracts with Clinica to provide certain services, including translation services and Medicaid eligibility determination services, but the true purpose of the arrangements was to pay Clinica for patient referrals. These referrals ultimately resulted in Medicaid reimbursements of over $100 million to the hospitals.

Cota and Lang were charged in separate criminal informations on June 28, 2014. Both are scheduled for sentencing on Jan. 15, 2015.

This case is being investigated by the FBI and HHS-OIG. The case was prosecuted by Assistant Chiefs Benton Curtis and Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sally B. Molloy of the Northern District of Georgia.

Updated September 15, 2014

Press Release Number: 14-837