Psychiatrist sentenced to prison for healthcare fraud scheme


An Indian-American doctor from Virginia Beach, Virginia, was sentenced Jan. 16, 2020, to 27 months in prison for defrauding Medicare, Medicaid, and Tricare, and other health care benefits programs out of hundreds of thousands of dollars, according to a press release from the Justice Department’s U.S. Attorney for the Eastern District of Virginia. The sentence meted out to Udaya K. Shetty, was pronounced by U.S. District Judge Rebecca Beach Smith.

Additionally, Shetty, 64, agreed to pay over $1 million to settle related civil claims,

As a licensed psychiatrist, Shetty was practicing medicine at his own practice, Behavioral & Neuropsychiatric Group.

According to the press release, court documents showed that in 2013, Shetty created a scheme by which he could overbill healthcare benefit programs by seeing patients for only five to 10 minutes, but then billing for services that were on average 41 to 63 minutes long. Shetty instructed his staff to often double, triple, or even quadruple book appointment times. The fraud became apparent when investigators discovered that on dozens of instances Shetty would need more than 24 hours a day of working to perform the services for which he billed, the Justice Department press release said.

In 2017, Shetty closed his own practice and joined another psychiatric practice, Quietly Radiant Psychiatric Services. While there Shetty, according to the press release, along with  one of his former employees, Mary Otto, engaged in a similar scheme. Although other Quietly Radiant staff members were responsible for billing, Shetty is said to have directed Otto to access the billing system and change all of his billing data to a higher billing rate.  Otto complied and changed the data without the knowledge of Quietly Radiant’s staff, the press release said.

“As a result of their actions, Shetty and Otto defrauded various healthcare benefit programs of more than $450,000,” the Justice Department said.

Otto pled guilty for her role in the scheme and was sentenced to 15 months in prison on January 10.

In regards to the civil settlement, the press release said, Shetty agreed to pay $1,078,000 to the United States and the Commonwealth of Virginia to resolve his liability under the False Claims Act and the Virginia Fraud Against Taxpayers Act for submitting or causing the submission of false claims to the Medicare, Medicaid, and TRICARE programs.



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