Hearing to determine loss from healthcare fraud begins

Following a month-long trial, a jury convicted Dr. Jorge Zamora Quezada of healthcare fraud in January, finding him guilty of misdiagnosing and over-treating patients. But now, his defense attorneys and attorneys for the federal government are back in court to determine how much money insurers and patients lost to the scheme.

Monday marked the first day of testimony on a hearing to determine the loss that will play into the sentencing for Zamora Quezada. The hearing is expected to last at least a week.

The attorneys for the U.S. government called on two witnesses on the first day — Veronica Bernal, an FBI victims specialist, and Michael Petron, a certified public accountant.

Petron, who works for a Washington-based investment banking and management consulting firm, testified for the government during the trial and was brought back for this hearing to talk about claims data that showed how much Zamora Quezada and his clinic billed to insurers.

He testified that the clinic billed $399 million to providers and received $99.7 million, however, the date range for the billing information is unclear.

Jacob Foster, one of the attorneys for the government, asked Petron about his calculations to determine the loss amount pertaining to patients who were believed to have been misdiagnosed. He looked 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.

Petron 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.

U.S. District Judge Ricardo Hinojosa pointed out that the calculation was strictly hypothetical.

Upon cross examination by one of Zamora Quezada’s attorneys, Stephen Lee, Petron said the claims data also included billing from other doctors that worked at Zamora Quezada’s clinic.

Lee also pointed out that the majority of the claims did not list rheumatoid arthritis as the diagnosis and that Petron did not personally examine patients’ medical records and therefore could not determine whether patients were really sick or not.

“You have no idea whether that’s a fraudulent claim or not, correct?” Lee asked regarding the billing for a specific patient.

“I have not made that determination,” Petron replied.

The hearing was paused for the day as Lee continued questioning Petron.

Earlier during the hearing, Bernal, the first to testify on Monday, talked about her work with patients who reached out to the FBI via a hotline that was established when Zamora Quezada was arrested in May 2018.

Under questioning by Rebecca Yuan, one of the attorneys for the government, Bernal spoke to some of the patients, obtaining their information and conducting a needs assessment. Of all the patients she spoke to, she said 80-90% of them needed crisis intervention services.

However, Hinojosa asked if Bernal had reviewed medical records herself, to which she replied she hadn’t and her testimony was based on what the patients told her.

Hinojosa noted that her testimony was mostly hearsay on hearsay, given that it relied on what patients said their doctors had said and expressed frustration at spending time on testimony that he wouldn’t be able to consider.

“This is not acceptable evidence,” the judge said, indicating that making a decision on that type of evidence could lead his judgment to be reversed by an appellate court.

The loss hearing will resume at 1 p.m.  Tuesday when the defense is expected to continue questioning Petron.

Editor’s note: This story was updated to correct information about patients and insurers.