Why good doctors go to prison

I know several good docs in prison. Could you be at risk?

An internist works part-time telemedicine helping disabled elders access needed durable medical equipment. She is paid $20 per patient. Now she faces an FBI investigation and up to 20 years in prison.

A family doc prescribes non-opioid cream to chronic pain patients. He is paid $30 per (virtual) patient by his employer who then bills Medicare $6000 per tube. FBI raids his home at midnight.

My friend, a surgical specialist, just got out of prison after falling for the same pain cream scheme.

What do these “good” docs have in common? Compassion, serving the underserved (for very little pay)—and naiveté.

Physicians are easy prey for criminals. And Medicare fraud has been very profitable since the program’s inception in 1965.

In the 1980s, my mom (a successful solo psychiatrist) was approached by two men wanting to collaborate in a business venture. She declined. They proceeded to use her Medicare number in a massive fraud scheme. When the FBI came to our door, Mom thankfully did not go to prison.

In 2015 when I helped Doc Randy launch his cash practice, two undercover DEA agents had already signed on as “patients.” For just $100/mo. he provided unlimited primary care. Despite the good doc’s warning against controlled substances, DEA agents manipulated and entrapped him. In 2024, at age 64 he got 15 years in federal prison for his “pill mill.”

I hope Randy doesn’t die there like my friend’s father imprisoned for his Philadelphia “pill mill.”

Last week I spoke with a frantic physician. I was her last phone call before entering prison. I’ve spoken with so many docs scammed, framed, or entrapped in such nightmares that (upon their request) I’m publishing their sage advice for the rest of us.

Top 12 ways to avoid DEA/FBI/federal prosecution

1. ALL contracts must be reviewed by your own health attorney, no exceptions.

2. Do not accept any third party non-patient income for services in a federal 
program.

3. If a patient is in a federal program, do not bill for third-party services.

4. Do not bill, charge, collect (on behalf of any insured patient) for pharmacy, equipment, lab, or imaging services without your attorney’s explicit approval.

5. Disclose revenue from third parties—always.

6. Do not dispense in-office drugs, unless for approved pharmaceutical research with appropriate contracts/disclosures after attorney approval.

7. Do not prescribe controlled meds outside DEA/FDA guidelines ever—no exceptions.

8. Avoid prescribing off label for controlled substances. (Many recent DEA raids in clinics using off-label ketamine for PTSD).

9. Do not share medical practice revenue or ownership with non-physician operators unless in compliance with your state’s medical practice act.

10. Do not use personal phone, email, text, Facebook, or any social media with patients.

11. Do not allow outside billing collection without independent audits.

12. Never release authorization for billing without attorney review of entity. If third party does your billing/coding, you as physician are still responsible for errors, chargebacks, overbilling, overcoding which may constitute fraud.

Top 12 questions answered on how to avoid DEA/FBI/federal prosecution

I hosted a live Q & A last week in our physician business mastermind where we heard directly from a doc recently released from prison. To join our follow-up session, contact Dr. Wible.

1. What are the most risky third-party contracts?

Non-risky. Non-negotiable. All US physicians have a contractual relationship with their medical board called their state’s medical practice act. You must comply with your state’s statutes for the privilege of practicing medicine. Note: most docs never read their state medical practice act until after they are in legal trouble. All US physicians have a contractual relationship with the federal government. You are opted into Medicare by default unless you opt out. Always comply with state and federal laws.

Low-risk. Negotiable. Physicians often have contracts with major employers, insurance plans, or pharmaceutical companies (principle investigator, speaker). Lawyered-up medical institutions’ contracts comply with law, though clauses may be disadvantageous for physician. Negotiate best terms.

High-risk. Negotiable. Beware of very friendly people wanting to collaborate with you. Beware of obscure companies offering you income, travel, perks. If they have access to your patient billing and/or financials, seek attorney consult. Negotiate best terms and ensure compliance with state/federal law before signing anything.

2. If I opt out of Medicare properly and do not accept insurance payments, I’m not a big risk for insurance fraud. Anything I’m not seeing here?

Beware of high-risk contracts with “collaborators” per question #1.

3. In a fully cash-based solo practice what contracts should I anticipate signing?

Lease, medical & office liability, EMR, lab, and attorney on retainer (optional).

4. Should my attorney review contracts for my medical liability policy or my lease for renting office space?

See question #1. Both are low-risk contracts. Both are negotiable. I got my medical liability premium reduced by 86% and you can too. Advocate for best lease terms. I rented an office in a wellness center for 10 years. When building sold to new risk-averse owners, they shifted HVAC/plumbing maintenance costs to tenants. I negotiated that clause right out of my renewal with no need for an attorney.

5. Is attorney review of EMR and insurance contracts overkill?

Involve attorney based on your personal risk assessment and your baseline anxiety. In my ideal clinic (opted out of Medicare), I had low risk and low anxiety so I never hired an attorney to review any contracts. Zero problems in 16 years.

6. “Do not accept any third party non-patient income for services in a federal 
program. If a patient is in a federal program, do not bill for third-party services. Do not bill, charge, collect (on behalf of any insured patient) for pharmacy, equipment, lab, or imaging services without your attorney’s explicit approval.” How would you explain that to a fifth grader?

If your mom is supposed to pick you up from school, do not get into a car with a stranger—even if the man says he is your best friend’s father. Do not accept money, or ice cream cones, or a trip to Disneyland from a stranger.

In our low-overhead ideal clinic model we adhere to disintermediation (removing middlemen). Maintain direct relationship with patients. Maintain direct relationship (if you choose) with Medicare. Patient’s chosen lab, pharmacy, durable medical equipment companies all should have direct relationships with Medicare (not you!). Do not be the fifth grader who gets enticed into a MediCAR with unknown third parties. Never share Medicare number, EIN, or financials with middlemen.

7. I have dispensing permission on my license. My rented office has a compounding hood where I hope to compound “magic butt paste” with cholestyramine for diaper rash. What are risks of mixing up and dispensing magic butt paste?

Magic butt paste seems low risk. Just don’t bill Medicare $6000 per tube. Our wise physician felon advises docs never to dispense from office. Good luck with your decision. Would suck to go to prison for magic butt paste! 😱

8. Is dispensing generic meds for high blood pressure and antibiotics risky?

Seems lower risk that magic butt paste. Review your state’s medical practice act for in-office dispensing. Why not offload liability risk to the pharmacy? Think like a lawyer, not a doctor.

9. Why can’t I use my personal cell with patients?

Best to separate personal from professional to avoid (appearance of) boundary violations.

10. Is buying equipment or supplements wholesale then marking up for patient purchase a problem?

Due to risk of patient exploitation, physicians should limit in-office sales to products of immediate need to patients. Provide free or at cost. Disclose fully the nature of your financial relationship with supplier. Indicate you are marking up price and patient can find equivalent elsewhere. Consult your state’s medical practice act or attorney regarding exclusive distributorships of health products only available through physicians’ office.

11. My local pharmacist appreciates how I work with her pharmacy when I care for patients. She is eager to refer patients with no PCP to me. I am eager to refer patients to her pharmacy. Any unforeseen risk?

As long as you never receive even one dollar outside of your billing, you are safe. No free lunches either! No perks or special favors! No discounts for dual relationships. Enforce strict boundaries.

12. How did stored medical records in a printer lead to a doctor going to jail?

Our wise physician guest shared the story of another doctor’s innocent purchase of an office printer (also used to fax/scan). When he sold device, patient medical records were retained in memory. Though doctor did not go to prison, he was fined for violation of patient confidentiality per occurrence $1.5 million.

This does not constitute legal advice and is intended for educational and entertainment purposes only and exclusively. Consult with your health attorney for specific issues.

Anything like this ever happen to you? Have questions?
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