Port Arthur Pain Management Clinic Employees Guilty of Fraud

BEAUMONT, TX—U.S. Attorney John M. Bales announced today that a 37-year-old Houston man has pleaded guilty to charges related to the closure of a pain management clinic in the Eastern District of Texas.

ASHLEY COLIN WALKES pleaded guilty to Misprision of Health Care Fraud today before U.S. District Judge Marcia Crone.

On June 2, 2009, KRISTI ROSE, 30, of Bridge City, Texas pleaded guilty to Conversion of Health Care Benefit Program Funds before Judge Crone.

According to information presented in court, Walkes was the manager of 4500 Gulfway Medic Management, which operated primarily as a pain management clinic in Port Arthur. Under Walkes' direction, the clinic generally saw up to 100 patients a day, most receiving Hydrocodone, Soma, and Xanax for pain management. Walkes, who had no medical training, ordered Medicaid, Medicare, and private insurance patients to attend physical therapy sessions in order to receive their prescription refills. However, cash patients were not required to attend those sessions. Rose was employed as office manager of Medic Management from March 2004 until the clinic's closure in January 2009. Walkes directed Rose to bill the physical therapy sessions as if a physician had performed them, but, as Walkes and Rose were both aware, they were actually performed by untrained, unlicensed, unsupervised personnel. Further, Medicaid, Medicare, and BCBS were billed for multiple physical therapy sessions each time the patient attended. Additionally, Rose, under the direction of Walkes, billed Medicaid and Medicare for thousands of physician office visits as a code indicating the patient spent 25 minutes with the physician, when the physician actually spent five minutes or less with each patient.

In total, Medic Management was fraudulently paid $4,315,280.21 by Medicaid, $514,390.24 by Medicare and $70,585.55 by Blue Cross Blue Shield. Walkes, who worked three days a week, paid himself over $4 million in cash and personal expenditures. As part of his plea, Walkes agreed to pay $4,900,256 in restitution and forfeit three bank accounts containing approximately $500,000.

Walkes faces up to three years in federal prison and Rose faces up to one year in federal prison at sentencing. Sentencing dates have not been set.

This case is being investigated by the Texas Attorney General's Office, Medicaid Fraud Control Unit and the Federal Bureau of Investigation and prosecuted by Special Assistant U.S. Attorney Christopher Tortorice and Assistant U.S. Attorney Bob Rawls.