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Health Care Fraud: Jose Penaranda Tan Sentenced To One Count Health Care Fraud

Occupational Therapist Owner of TSM Sentenced for Making False and Fraudulent Statements Related to Health Care Benefits

GREENEVILLE, Tenn. – On April 16, 2018, Jose Penaranda Tan, 58, of Morristown, Tennessee, was sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 12 months and one day in federal prison. In addition to his prison sentence, Tan must also pay restitution to Medicare, Medicaid (known as TennCare in the state of Tennessee), Cigna, Optum, and Blue Cross Blue Shield (BCBS) of Tennessee in an amount to be determined by Judge Greer.

Tan pleaded guilty in June 2017 to one count of a 35-count indictment charging him with health care fraud, false statements related to health care matters, and aggravated identity theft.

Tan was the owner and operator of Therapeutic Services of Morristown (TSM), a clinic providing occupational, physical, and speech therapy services, specializing in pediatric care. He worked at TSM as a therapist and as a supervisor of various employees, including the therapists and administrative assistants who were responsible for submitting bills to Medicare, TennCare, and private health insurance companies. A detailed account of his offenses is included in the indictment and plea agreement on file with the U.S. District Court.

Tan admitted that over the course of more than two years, he submitted, or caused to be submitted, almost 10,000 false and fraudulent claims to government and private insurers, totaling approximately $1 million. He instructed employees to bill insurers as if TSM therapists were providing individualized therapy sessions to patients, when in fact Tan directed therapists to treat patients in group settings. By falsely claiming that TSM therapists were providing individual therapy, rather than group therapy, Tan was able to secure higher rates of reimbursement from Medicare, TennCare, Cigna, Optum, and BCBS. Additionally, Tan knowingly and fraudulently used the National Provider Identifiers of former therapist employees to bill for therapy services that were provided by non-credentialed therapy assistants, rather than by qualified and credentialed therapists.

This fraud resulted in Medicare, TennCare, Cigna, Optum, and BCBS paying approximately $400,000 to TSM, to which the clinic was not entitled.

“The U.S. Attorney’s Office will continue to pursue charges against health care providers in the Eastern District of Tennessee who fraudulently bill and obtain payments from our federal healthcare benefit programs, such as Medicare and Medicaid, for services not provided. We will use all resources available to ensure the government is reimbursed for funds owed by these individuals and entities who receive payments to which they were not entitled,” said U.S. Attorney J. Douglas Overbey.

This therapist stole the identities of licensed providers and used them to obtain payments from federal health programs,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “He cheated his patients out of the care they deserved and is now paying the price for his actions.”

This case was investigated by the Department of Health and Human Services – Office of the Inspector General and the Tennessee Bureau of Investigation. Assistant U.S. Attorneys David Gunn and T.J. Harker represented the United States.

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