Texas Health Clinic Owner Sentenced for Workers’ Comp, Insurance Fraud

The owner of a Houston health clinic pled guilty to insurance fraud after billing for medical services – often provided to injured employees – despite having no licensed medical staff at the clinic, the Texas Department of Insurance reported.

Instead, investigators found that the clinic was using foreign medical students to provide care.

Rosemary Phelan, the owner of Rose’s Houston Healthcare Clinic, entered a guilty plea in Harris County Court and was sentenced to seven years deferred adjudication and ordered to pay $88,000 in restitution.

A joint investigation by the Texas Department of Insurance Division of Workers’ Compensation and Texas Mutual Insurance Co. revealed that Phelan’s clinic had no licensed medical providers on staff yet continued to accept patients. She would then file fraudulent workers’ compensation claims to collect from insurers.

Texas Mutual said the case came to its attention when a physician contacted a Texas Mutual case manager and reported that he no longer worked for Houston Healthcare Clinic in June 2012. However, pharmacy records indicated that an injured worker received prescriptions the physician allegedly wrote at Houston Healthcare Clinic through October 2012.

According to investigators, when the doctor left in 2012 Phelan began hiring foreign medical students to act as doctors and treat patients.

Workers’ Compensation Commissioner Ryan Brannan said this case was particularly egregious. “Someone filing false claims is bad enough,” he said. “But this scam put people’s health at risk. It’s unconscionable.”

Phelan submitted $166,843 in fraudulent workers’ compensation claims, representing more than 50 injured employees, claiming they had been treated by the clinic’s previous doctor.

Phelan pled guilty to second degree insurance fraud and a felony charge of practicing medicine without a license. The investigation found that her clinic was supplying narcotics to patients using the credentials of doctors and physician assistants who no longer worked at the clinic without their knowledge.

Source: Texas Department of Insurance

Topics Texas Fraud Workers' Compensation Medical Professional Liability