Government, defense rest in loss hearing for healthcare fraud case

Dr. Jorge Zamora Quezada

The hearing to determine how much money insurers and patients lost from a healthcare fraud scheme concluded Tuesday following nearly eight hours of testimony.

After attorneys for the U.S. government rested their case Tuesday, attorneys for Dr. Jorge Zamora Quezada — the Edinburg-based rheumatologist convicted of healthcare fraud in January — began and rested their case which included three witnesses.

The continuation of the hearing on Tuesday began with the continued cross examination of Michael Petron, a certified public accountant who testified as a witness for the government.

Petron had testified Monday that he looked at 605 patients who were diagnosed with rheumatoid arthritis by Zamora Quezada but who later saw another doctor who did not diagnose them with the disease.

For those patients, Petron found that Zamora Quezada billed $9.8 million to insurers and received $2.3 million back from those claims.

He then came up with a “misdiagnosis rate” that he applied to the rest of Zamora Quezada’s pool of patients. Based on that rate, he calculated that the doctor billed $118.9 million and received $29.8 million from insurers.

On Tuesday he clarified to U.S. District Judge Ricardo Hinojosa that his testimony is based on whether patients were billed who had a diagnosis for rheumatoid arthritis but did not make a determination on whether they actually had that disease as he is not a medical expert.

Under cross examination by Stephen Lee, one of Zamora Quezada’s attorneys, Petron acknowledged that the sample of patients he looked at were not randomly selected and that he wouldn’t ultimately select patients in the manner that this was done for a random statistical sample.

When Lee pointed to a dataset of patients, he also acknowledged that about the vast majority of them did not call an FBI hotline that was set up upon the doctor’s arrest in May 2018 for the purposes of connecting the government with possible victims.

Of the people who did call the hotline, some were added to a list the government considered victims.

When asked to review those “victims” in a spreadsheet, Petron also noted that the majority of them did not have a specific designation that said they were misdiagnosed.

On re-direct, an attorney for the government, Jacob Foster, established that there could have been different designations in the spreadsheet to indicate whether a patient was misdiagnosed.

After Petron was excused, the defense presented their case, concluding with a CPA of their own, Mariela Ruiz who teaches at the University of Texas Rio Grande Valley and practices at her own CPA firm. She also previously worked for DHR Health as the director of finance and accounting.

Trey Martinez, another one of Zamora Quezada’s attorneys, asked her about calculations she made regarding claims data,

Ruiz said she calculated that about $1.89 million was paid to Zamora Quezada and his clinic for claims that were tied to diagnosis of rheumatoid arthritis, much lower than the amount Petron reached.

She explained that her pool of patients was bigger than the one used by the government, making her “misdiagnosis rate” smaller.

Her pool was bigger, she said, because she included data from a doctor that the government had excluded.

Ruiz also clarified that she only looked at claims data for services that were specifically tied to rheumatoid arthritis instead of a broader inclusion of services for patients with a primary diagnosis of rheumatoid arthritis.

She told Foster that she didn’t consider the possibility that those services were only administered since the patient visited the doctor because they were diagnosed with RA in the first place.

Earlier in the hearing, the defense also called on Hermina Rios, the custodian of records for Zamora Quezada’s clinic.

Before she became records custodian, she worked in billing for the clinic beginning in August 2016.

She testified that former patients had various insurance providers other than the ones from which data was collected from the government.

Ruiz said it wasn’t normally expected that insurers would pay the full amount that was billed to them and that when they weren’t paid the full amount, they did not regularly charge the patient for the difference.

She added that most of the payments were associated with claims with diagnoses other than rheumatoid arthritis.

Under cross examination by Rebecca Yuan, another of the attorneys for the government, she acknowledged that she wasn’t the person actually submitting those claims and that she was not there to testify whether the claims were legitimate or not, just that they were made.

Rios also said she had no knowledge of the doctor’s billing practices before she started working there in 2016.

The defense also called on FBI agent James Wilson, who was in charge of the case against the doctor.

Wilson said there were no medical experts or statisticians involved in selecting which patients were going to be included in the indictment against Zamora Quezada, and that some of their cases were reviewed by second opinion doctors or independent medical experts.

Martinez asked whether the government retrieved any records beyond the approximately 60 patients that the government interviewed for the case, to which Wilson said he didn’t think so.

When questioned by another of the attorneys for the government, Adrienne Frazior, Wilson went over the work he did in the case which included interviews with victims, doctors and employees.

He also served subpoenas, executed search warrants and retrieved medical records from the Texas Medical Board.

After the doctor’s indictment, he conducted about 40 patient interviews.

He also talked to around 20 doctors and former employees of Zamora Quezada’s clinic.

After both sides rested Tuesday, the judge instructed them to file briefs of their arguments, setting a Nov. 10  deadline for the government and Nov. 24 for the defense.

At a later point, Hinojosa will set a sentencing hearing during which he is expected to issue a ruling on the loss amount.