A Justice Department lawsuit describes a sweeping fraud scheme in which dozens of Texas providers and front companies funneled millions in lab test bills through a small rural hospital that eventually shuttered in 2018.
At the heart of the scandal is Little River Healthcare, a bankrupt health care management company that took over the operations of a critical access hospital in Rockdale, Texas in 2014 and allegedly used the hospital’s favorable government reimbursement rates to broker deals with unscrupulous partners and rake in millions in profit.
The story of rural hospitals getting scammed by shady lab test vendors is a familiar one, and the government has been playing whack-a-mole with these companies for years. In 2020, the DOJ indicted ten people it said fraudulently billed private insurers $1.4 billion under a similar scheme.
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