The lab owner was sentenced to nine years in prison for a role in filing a false claim for unnecessary Covid-19 tests using nose swab specimens by nursing home residents and others, and was mistakenly charged $369 million from Medicare.
Lourdes Navarro, Glendale, California, owns and operates the Matthias Clinical Institute, also known as the Institute of Healthcare Providers, along with partner Imran Shams.
According to a press release from the Department of Justice, the pair collected specimens from nursing homes, living facilities, schools and other facilities, and subsidized living facilities, schools and other facilities. However, instead of filling out an order “to conduct screening tests to identify and isolate individuals infected with Covid-19,” we ordered a medically unnecessary respiratory pathogen panel (RPP) test.
These actions led to the HCP Institute charging $369 million for Medicare, which ultimately reimbursed over $46 million over two years, the DOJ reported.
Federal law enforcement officials have recently cracked down on pandemic-related fraud in long-term care and elsewhere, particularly through the Covid-19 fraud enforcement task force.
Navarro pleaded guilty to conspiracy to commit health care and wire fraud in October 2023. Shams pleaded guilty on January 24, 2023 and was sentenced to 10 years in prison on January 30, 2024, conspiracy to commit medical fraud and cover-up of exclusion from medical care.
Shams also added a crime committed in New York: conspiracy to commit money laundering, conspiracy to receive payments and kickbacks, and a five-year sentence for fraudulent US by obstructing the legal functions of the IRS.
In addition to his prison sentence, Navarro, 66, was ordered to pay more than $46.7 million in reparations, losing $11.6 million in funds that the government had previously seized from three bank accounts. Federal officials say the total amount seized and forfeited from Navarro and Shams is more than $14.5 million.
In an indirectly related case last week, Unified Care Services LLC, a nursing home chain based in Torrance, California, was ordered to pay $18 million to claim its owner and affiliates are small businesses with fewer than 500 employees, but the chain had more than 10 entities under its umbrella.
In that case, false information was submitted for the Paycheck Protection Program Loan Application and Loan Exemption Application, despite unified care being ineligible for payments, as sought by the same Covid-19 fraud enforcement task force that carried out the Navvaro-Shams case.
