Healthcare Compliance Perspective – Healthcare Fraud Scheme:
Compliance Officers should develop audit plans, approved by the Compliance Committee, to periodically review 
third party payor statements/invoices that are sent to residents to ensure that billed third party provider services match actual services provided.
Dr. John J. Cauthon, 51, of Murfreesboro, Tennessee, was sentenced yesterday in U.S. District Court to two years in prison for healthcare fraud, announced the U.S. Attorney for the Middle District of Tennessee. Cauthon was indicted in October 2015 on seven counts of healthcare fraud and was found guilty on four counts, after a jury trial in September 2017.
In sentencing Cauthon, the Chief U.S. District Judge noted that Cauthon had accepted no responsibility for his actions and showed no remorse. The Chief Judge also ordered Cauthon to pay $218,000 in restitution.
Cauthon is a podiatrist in Murfreesboro who contracted to provide podiatric services to residents of nursing homes located throughout Tennessee.
According to court documents, between May 2014 and August 2015, Cauthon engaged in a scheme to defraud Medicare, TennCare, and BlueCross BlueShield of Tennessee, by submitting $200,000 in fraudulent claims for a surgical procedure for nail avulsions, which he did not perform.
At trial, numerous witnesses from nursing homes across the state of Tennessee testified that Cauthon never performed the avulsion procedures that he claimed he performed; including in some instances, claiming that he had performed more than 30 avulsions in a single day. Nursing home residents also testified that Cauthon simply clipped their toenails. Former employees also testified that Cauthon directed them to bill Medicare for services that were medically unnecessary and directed them to fit bed-ridden patients in nursing homes with ankle braces, which served no medical purpose.
