Lauderdale County Doctor Sentenced for Health Care and Wire Fraud

FLORENCE—A federal judge today sentenced a Lauderdale County physician to one year and a day in prison for health care fraud totaling about $1 million in connection with billing a health insurer and Medicare for non-reimbursable cosmetic skin treatments, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein.

U.S. District Judge Inge P. Johnson sentenced Diana K. McCutcheon, 55, of Killen, on four counts of health care fraud and two counts of wire fraud. Judge Johnson ordered McCutcheon to pay of restitution of $990,389 to Blue Cross Blue Shield of Alabama and Medicare. She also must pay the same amount to the government as proceeds of illegal activity. McCutcheon agreed to the forfeiture in her plea agreement with the government. She pleaded guilty to the charges in November.

“This defendant carried on a scheme for several years, fraudulently billing private and public insurance plans for payments she was not entitled to,” Vance said. “That kind of fraud drives up health care and insurance costs for everyone. It will not be tolerated,” she said.

“This is not a victim-less crime,” Schwein said. “Every person who struggles to pay for health care benefits; every older person who worries about Medicare’s ability to cover them; every taxpayer who helps fund these programs are all victims. We will continue to work together with our partners to identify and stop those who would line their own pockets with taxpayer money—those who seek to benefit at the expense of our health care system, our economy, and our collective well-being,” he said.

McCutcheon conducted her fraud through her medical clinics in Elgin and Lexington in North Alabama. According to court records, she operated a scheme to defraud Blue Cross Blue Shield and Medicare between 2007 and 2011 by fraudulently billing for the removal of multiple skin lesions on patients who had received cosmetic laser and other treatments for various skin conditions. The conditions included sun spots, age spots, and wrinkles, and treatments were not covered by insurance.

The FBI, with assistance from the U.S. Department of Health and Human Services, investigated the case. Blue Cross Blue Shield of Alabama also assisted in the investigation. Assistant U.S. Attorneys Russell E. Penfield and Ramona Albin are prosecuting the case.