MICHIGAN CITY | A physician with practices in Michigan City and Chicago has been indicted on federal charges of submitting more than $3 million in false medical claims to private insurers and the government.
Paul Madison, 59, was indicted Dec. 20 by a grand jury on six counts of health care fraud, three counts of making false statements and two counts of aggravated identity theft, according to the U.S. Attorney's office in Chicago.
All of the charges are linked to his alleged practices from Watertower SurgiCenter, LLC, an outpatient facility he owns at 845 N. Michigan Ave.
Jeanette Shin, 67, a nurse at the medical facility, was also indicted on three counts of making false statements in medical reports, authorities said.
Madison, an anesthesiologist and pain management specialist, is also medical director and founder of Midwest Pain Clinic at 907 Washington St., Michigan City.
According to the U.S, Attorney's office, Madison, between 2005 and 2009, directed Watertower's billing staff to submit false bills to insurers for a certain procedure to patients that chiropractors had not performed. Madison disguised the fraudulent billing by creating false medical and billing records and by directing billing staff, nurses, chiropractors and others at the clinic to create false records. The indictment also alleges that Madison ordered the director of billing and others to destroy accurate files and replace them with fraudulent reports and directed some staff members to lie to state investigators about the billing practices.
Shin allegedly falsified her reports by making false claims about certain procedures she knew had not been performed.
According to the U.S. Attorney's office, Madison caused more than $3.5 million in bills to be submitted for medical services not provided to Blue Cross Blue Shield of Illinois, Hartford Insurance Co. and seven other private insurance companies along with the U.S. Dept. of Labor's Office of Workers' Compensation Programs.
The insurance companies lost more than $780,000 as a result of the alleged scheme.
The indictment seeks full compensation from Madison and if he doesn't have enough cash, the forfeiture of his assets. Each count of health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, said authorities.