Healthcare Fraud: Rafael Chikvashvili Sentenced for Charges Related to a health Care Fraud and Wire Fraud Conspiracy

Healthcare Fraud
Healthcare Fraud

Maryland Health Care Provider Sentenced to 10 Years in Federal Prison for Health Care Fraud RRafael Chikvashviliesulting in Patient Deaths

Patients Died Because No Radiologist Reviewed X-Rays; Defendant Cheated Medicare and Medicaid of More Than $6 Million

Baltimore, Maryland – U. S. District Judge James K. Bredar sentenced the owner of Alpha Diagnostics, Rafael Chikvashvili, age 69, of Baltimore, Maryland, today to 10 years in prison, followed by two years of supervised release, for charges related to a health care fraud and wire fraud conspiracy resulting in the deaths of patients, as well as false statements and aggravated identity theft, related to a scheme to defraud Medicare and Medicaid of more than $6 million. Judge Bredar also ordered that Chikvashvili pay restitution and forfeit proceeds of the fraud, with the exact amount to be determined at a later date. Chikvashvili has been detained since his conviction by a federal jury on February 17, 2016.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.

“The evidence showed that Rafael Chikvashvili failed to provide medical services to patients who needed them, and billed for services that he did not provide,” said U.S. Attorney Rod J. Rosenstein. “The jury found that two patients died because their X-rays were not reviewed by a qualified radiologist. Health care fraud has consequences, in money wasted and lives lost.”

According to the evidence presented at the two-and-a-half week trial, Chikvashvili formed Alpha Diagnostics Services, Inc., which later became Alpha Diagnostics, LLC, in 1993, and was the Managing Member, Authorized Official, Managing Employee, President and Chief Executive Officer for Alpha Diagnostics. Chikvashvili holds a PhD in mathematics, but was never a medical doctor or licensed physician. Timothy Emeigh was the Vice President in charge of Operations at Alpha Diagnostics and was a licensed radiologic technologist.

Alpha Diagnostics was a portable diagnostic services provider, principally of X-rays, but also provided ultrasound tests, and cardiologic examinations.  Alpha Diagnostics’ clients included nursing homes whose patients were covered by Medicare and Medicaid. Alpha Diagnostics operated in Maryland, Delaware, Pennsylvania, Virginia and the District of Columbia, but was headquartered in Owings Mills, Maryland, where Chikvashvili worked full time.

Based on the evidence, the jury found that from 1997 through October 2013, Chikvashvili conspired with others to defraud Medicare and Medicaid by: creating false radiology, ultrasound and cardiologic interpretation reports; by submitting insurance claims for medical examination interpretations that were never completed by licensed physicians; by falsely representing to Medicare and Medicaid, as well as to treating physicians, that the interpretations had, in fact, been completed by actual licensed physicians; by submitting insurance claims for radiology, ultrasound and cardiologic examinations (and their associated costs) that were never performed and/or were not ordered by the treating physician; and by submitting claims for transportation and other charges that Alpha Diagnostics was not entitled to receive.

According to witness testimony, Chikvashvili instructed his non-physician employees, including Emeigh, to interpret X-rays, ultrasounds and cardiologic examinations instead of licensed radiologists. For example, in June 2012, Emeigh traveled to Jamaica for a vacation.  The evidence showed that Chikvashvili directed Emeigh, through text messages and telephone calls, to view medical images using his personal laptop in his hotel room and then draft false physician interpretation reports.  Alpha Diagnostics personnel subsequently submitted false claims to Medicare for these images and fraudulent physician reports.

The evidence showed that Chikvashvili also caused employees to draft licensed physician’s examination reports.  Chikvashvili, in turn, caused a copy of the handwritten signature of the actual physician to be affixed to the report, or forged the physician’s signature himself, creating the appearance that a licensed physician had performed the medical interpretation.

According to the testimony provided at trial, two patients died because their X-rays were not interpreted by a qualified radiologist.  Instead, non-physician Alpha Diagnostics employees reviewed the images and failed to detect congestive heart failure. As a result of the incorrect reading the her chest X-ray, the first patient with congestive heart failure was not transferred to an acute care facility for treatment, as is standard medical practice, but remained in a rehabilitative nursing home. The patient died four days after unqualified Alpha Diagnostics personnel misinterpreted her chest X-ray.  Witnesses testified that had the patient been transferred, her symptoms could have been addressed. The second patient was scheduled to undergo elective surgery and the chest X-ray was a pre-operation test to determine if the patient could safely have surgery.  According to the evidence presented at trial, although the patient’s X-ray revealed mild congestive heart failure, the non-physician Alpha Diagnostics employee failed to detect it.  A patient in congestive heart failure is at an increased risk of bleeding during and after surgery. As a result of the incorrect reading of the chest X-ray, the patient was cleared for elective surgery and experienced significant bleeding after the elective surgery, and the worsening of her congestive heart failure.  Six days after unqualified Alpha Diagnostics personnel misinterpreted her chest X-ray, the patient died.

Subsequently, Alpha Diagnostics submitted claims to Medicare falsely representing that licensed radiologists had interpreted both patients’ chest X-rays.  Medicare paid Alpha Diagnostics $8.87 for the first claim and $218.36 for the second claim.

The evidence showed that over the course of the conspiracy, Chikvashvili and Alpha Diagnostics received more than $6 million from fraudulent claims submitted to Medicare and Medicaid.

Timothy Emeigh, age 51, of York Springs, Pennsylvania previously pleaded guilty to health care fraud and is scheduled to be sentenced on June 17, 2016.

United States Attorney Rod J. Rosenstein praised the HHS-OIG and the FBI for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorneys Leo J. Wise and P. Michael Cunningham, who prosecuted the case.

Original PressReleases … 

FBI Original Announcements

A longtime Maryland health care provider was sentenced to 10 years in prison recently for cheating Medicare, Medicaid, and private insurers out of more than $20 million—and causing patients to die as a result.

“This was an unusual case,” said Special Agent Keith Custer, who led the investigation from the FBI’s Baltimore Division. “Most health care fraud that results in injury or death happens when providers illegally bill for unnecessary procedures. This case wasn’t about providing unnecessary care, it was about denying people the care they desperately needed and deserved.”

Rafael Chikvashvili, a 69-year-old Baltimore resident, owned Alpha Diagnostics, a company that provided portable X-rays and other examinations to patients primarily in nursing homes and retirement communities in the Maryland area.

Beginning in 1997, Chikvashvili conspired with others to defraud Medicare, Medicaid, and other insurers in a variety of ways, including by creating false radiology reports that were never ordered or interpreted by a physician. What caused at least two patient deaths, according to court testimony, was that Chikvashvili instructed his non-physician employees—including Timothy Emeigh, the company’s vice president of operations, who was a radiologic technologist but not a doctor—to interpret X-rays instead of sending them to licensed physicians.

A non-physician Alpha Diagnostics employee reviewed one nursing home resident’s chest X-ray images and failed to detect congestive heart failure. As a result, the patient was not transferred to an acute care facility for treatment—which is standard practice—but remained in the nursing home, where she died four days later. Had the patient been transferred, experts said, her symptoms could have been addressed.

A second patient had a chest X-ray as a pre-operative test to determine if she could safely undergo elective surgery. The non-physician Alpha Diagnostics employee who interpreted the X-rays failed to detect mild congestive heart failure. As a result, the patient was cleared for surgery, after which her congestive heart failure worsened. She died six days later.

“The vast majority of Alpha Diagnostic’s client base was from nursing homes and retirement communities,” Custer said. “This is an extremely vulnerable population,” he explained, “because it is not unexpected when they become sick and die. That was how Chikvashvili’s fraud was able to go on for nearly 20 years.”

In 2013, two Alpha Diagnostics X-ray technicians contacted authorities and said the company was upcoding—an illegal practice in which businesses bill insurance providers for more expensive services than were performed. The employees also said they suspected Emeigh was doing X-ray interpretations at Chikvashvili’s instruction and that real doctors’ names were being used fraudulently.

Custer and investigators from the U.S. Department of Health and Human Services Office of Inspector General began interviewing doctors whose names were on the X-ray reports. “It was clear from the beginning that the reports were fakes,” Custer noted. One of the doctors was living out of the country when the reports with his name were created, and others confirmed that their names and provider numbers had been used fraudulently.

Chikvashvili, who holds a Ph.D. in mathematics but was never a medical doctor or licensed physician, claimed through his defense attorneys he was unaware of any wrongdoing and blamed the situation on actions by his employees. But a jury heard evidence to the contrary. In February 2016, he was convicted on a variety of charges related to the fraud and was sentenced in June. Emeigh, 52, had previously pleaded guilty to health care fraud and was sentenced to four years in prison.

Emeigh told investigators that prior to the fraud scheme being shut down, he was doing nearly 80 percent of Alpha Diagnostics’ X-ray interpretations in Maryland—readings that should have been done by a licensed physician. “He probably did tens of thousands of them over the course of the fraud,” Custer said. “There is no telling how many patients suffered or died because of these crimes.”

Original PressReleases …


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