Physicians linked to Dr. Gallups’ ENT practice were coerced into ordering these unnecessary tests from Next Health, a Texas-based lab. As part of Oxendine’s healthcare fraud scheme, Next Health agreed to give Oxendine and Dr. Gallups a kickback of 50 percent of the net profit for eligible specimens submitted by Dr. Gallups’ practice to the lab company.
John Oxendine, the former Georgia Insurance Commissioner, was sentenced to three and a half years in prison for conspiracy to commit healthcare fraud in connection with unnecessary lab testing.
U.S. Attorney Buchanan stated that in court, it was revealed that John Oxendine collaborated with Dr. Jeffrey Gallups and others to file false insurance claims for unnecessary Pharmacogenetic, Molecular Genetic, and Toxicology testing.
Physicians linked to Dr. Gallups’ ENT practice were coerced into ordering these unnecessary tests from Next Health, a Texas-based lab. As part of Oxendine’s healthcare fraud scheme, Next Health agreed to give Oxendine and Dr. Gallups a kickback of 50 percent of the net profit for eligible specimens submitted by Dr. Gallups’ practice to the lab company.
“Oxendine abused his position as the former Georgia Insurance Commissioner by undermining the integrity of the state’s healthcare system when he conspired with a physician to order hundreds of unnecessary and costly lab tests,” said U.S. Attorney Ryan K. Buchanan.
Oxendine and Dr. Gallups orchestrated a scheme at the Ritz Carlton in Buckhead, Georgia, pressuring doctors to order unnecessary tests at Dr. Gallups' practice. Next Health then submitted fraudulent insurance claims totaling over $3 million, resulting in insurance companies paying out more than $750,000.
In return, Next Health paid $260,000 in kickbacks to Oxendine and Dr. Gallups. Patients were also billed up to $18,000 for these unnecessary tests. To cover their tracks, kickback payments were funneled through Next Health to Oxendine Insurance Services, Oxendine's consulting business. Oxendine used some of the kickback money to make a $150,000 charitable donation and cover $70,000 in legal fees for Dr. Gallups.
“John Oxendine was motivated more by personal greed than his duty to patients and the citizens of Georgia whom he used to represent,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “Not only did the former state insurance commissioner line his pockets off the unnecessary tests, but he also directed another to lie to federal agents to try and cover up the fraud. The FBI will continue to investigate healthcare fraud to ensure those who abuse the system are brought to justice.”
When the compliance officer at Dr. Gallups' practice expressed worries about kickbacks, Oxendine advised Dr. Gallups to fabricate the story by claiming the payments were loans. Furthermore, he instructed Dr. Gallups to stick to this false narrative when questioned by federal agents regarding Next Health. During an interview with the Atlanta Journal-Constitution about Next Health in relation to a private lawsuit, Oxendine deceitfully denied any involvement with the lab company or receiving any funds from the business.
John W. Oxendine, a 62-year-old resident of Port St. Joe, Florida, received a sentence of three years and six months in prison from U.S. District Judge Steve C. Jones. Following his prison term, he will be under supervised release for three years. Additionally, Oxendine was instructed to pay $760,175.34 in restitution and a $25,000 fine. He admitted guilt to the charges on March 22, 2024, leading to his conviction.
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