The Houston Chronicle has reported that a Houston podiatrist and his business partner have been charged with $45 million in healthcare fraud in relation to the billing of bioengineered skin substitutes Dr. David Jenson and Nestor Refael Romero Magallanes are also accused of trying to cover up the fraud after they became aware of a federal investigation into their business, Doctor’s Inc. According to the indictment by the Department of Justice (DOJ), the men were charged with 14 counts of healthcare fraud stemming from allegations which included applying skin substitutes to patients who did not have wounds, sometimes telling patients that the treatments were stem cells used to treat body pain or swelling. They also advertised the treatment as an energy booster and a solution to “repair anything that is damaged within the body.”
The DOJ stated that the men submitted false statements to Medicare describing wounds the patients didn’t have, and created follow-up reports purporting to show the wounds were healing. After the business was searched by federal agents, the men are accused of pressuring patients into writing statements that they had the wounds they were treated for. Additionally, the patients were told that the entire treatment was covered by Medicare and that they were not responsible for co-payments. From 2022 to 2024 the business billed over $90 million in claims to Medicare for bioengineered skin substitutes and were reimbursed for more than $45 million. Jenson and Magallanes allegedly spent the profits on cryptocurrency, expensive jewelry, and vehicles, as well as travel on private jets. According to the indictment, the business was warned about their billing procedures in February 2023 but continued the practice. They have both pleaded not guilty, according to court records, and their attorney says they will fight the charges.
Dr. Fife is a world renowned wound care physician dedicated to improving patient outcomes through quality driven care. Please visit my blog at CarolineFifeMD.com and my Youtube channel at https://www.youtube.com/c/carolinefifemd/videos
The opinions, comments, and content expressed or implied in my statements are solely my own and do not necessarily reflect the position or views of Intellicure or any of the boards on which I serve.
Obviously greed took a good hold on them.
10000 profit per graft here and they put them on weekly until insurance doesn’t pay for it anymore. Imagine 9 grafts with no healing and then kicked to the curb because insurance won’t pay for more
Need to get them all of them (every practice) that’s committing fraud. My ex-husband had a Worker’s Compensation doctor falsify a report years ago and he didn’t even evaluate/exam him. It was mailed to us anonymously to expose him. Also, how about dentists referring a patient to their colleagues for additional trays that were not necessary!
Greed! Lol 🤣. I say so.. The Government only reimburses at 30% on the dollar billed to them for Medicare and Medicaid . Insurance companies pay at 30- 70% .It’s why the medical costs have soared so. If you have to pay cash out of pocket , file for indigent and see if you qualify first. I worked for a pharmaceutical company and dealt with that with managed care
As George Carlin says: Bring back beheading
Lol!
Wow! But sadly not surprised!
All this fraud is getting way out of hand. We need to crackdown hard on these criminal whether it be postal workers or doctors. These are taxpayers they are stealing from and the seniors are charged higher Medicare premiums to off set this fraud ! Life sentences and throw away the key!!!
Amen
Shows you how incompetent the government is. There’s no way two people can do that volume of work. Anyway. There should be an automatic audit for anybody billing over a million dollars in a year automatically
Allografts are effective in wound management but unfortunately abuse by some is affecting everyone. CMS is responsible for not regulating the Allografts and authorizing thousands of dollars reimbursement per square centimeters, allowing medical practices to abuse the Allograft use. Minimize the reimbursement and Abuse will stop. Simple.
By tge time the wounds qualify they are bad. Sad can only get so many cm at a time when more is needed. These wiunds cost people their lives, hospitalizations, reduced quality of life and they have to be begged for.
AMEN!
No wonder Trump is going after Medicare , too much fraud in the system
And they’re not illegal immigrants!!
I’m Going thru the same thing Workers Comp Fraud. A Doctor Documented Exam and Testing that he Did Not Perform
I feel the government is more responsible and the people who work there are the reason they get scammed. Shame.on them
Of course it’s the government’s fault? At best faulty logic.
How is the government responsible for people’s complete and utter negligence? They are responsible for regulation that should help steer good decisions… how about requiring a repayment or claw back if the patient being treated with this angel dust people are selling still loses a limb or digit ? Or, what if the patient dies within 6 mos after treatment? Maybe people would stop going to hospice and nursing homes and treating wounds that “failed” conservative treatment. The few are no longer creating a bad representation of those practicing wound care – it is now the majority. These things are not life or limb saving – amputation rates are still the same or worse than they ever have been.
The government isn’t responsible for fraud. That is why these people are in trouble. It isn’t “angel dust” though. It is actually human tissue that actually helps wounds heal faster. No, there shouldn’t be repayment if the oatient still loses a limb, because that can happen regardless of the tissue placement. The patient may be non compliant with treatment that subsequently caused the amputation. Infection can happen at any time and could be non related to the tissue placement. Don’t punish the ones that are following regulations.
No kidding it’s not angel dust? I’m just pointing out how it is marketed. And if the patient still loses a limb after placement, then the root cause was never addressed and the provider failed to address why the wound was present in the first place. Basics of wound care were ignored more than likely.
The government isn’t responsible for fraud. That is why these people are in trouble. It isn’t “angel dust” though. It is actually human tissue that actually helps wounds heal faster. No, there shouldn’t be repayment if the oatient still loses a limb, because that can happen regardless of the tissue placement. The patient may be non compliant with treatment that subsequently caused the amputation. Infection can happen at any time and could be non related to the tissue placement. Don’t punish the ones that are following regulations
They will get probation and a $1,000 fine ..another person shoplifts a candy bar and gets 6 months ..white collar fraud pays well
This comment is complete ignorance. The partner is actually from Venezuela… not white… Venezuelan.
While there will always be fraud committed by desperate people, you also need to place blame on Medicare, who rarely puts out “rules” and only puts out non-specific “guidelines“, and Wound Product distributors/sales people who get paid extremely large amounts of money to push these products on doctors who shouldn’t be using them. The distributors, the companies they work for, and the manufacturers they represent are paid more than the doctors make who are applying these products even when correctly and appropriately. Honest & caring wound care doctors are often torn between not using appropriate treatments in therapy for patients because non-medical professionals are judging their medical judgments, physicians having to pay 50-70% or more of what they do get paid by Medicare back to the distributors, having wounds get worse and patients facing loss of limb or death due to delays in approvals, opening the door for money-hungry, unethical lawyers, and if they do get the approval and apply the products and they work and the patient heals, having Medicare compliance people who are paid to deny care patients & payments to doctors or “bribed” to take back full payments from doctors who are paying 50-70% of their payment to the Manufacturer who has ZERO liability or responsibility. The whole system is flawed!!! Unethical doctors should certainly be held responsible, but so should unethical, distributors, sales reps, manufacturers, Lawyers, Congressman, and Medicare who specializes in “non-specific” guidelines. So don’t just be blaming doctors!!!
Totally Agree!!
If they were “warned” in ’23 why were they allowed to continue ? Kickbacks to officials maybe ? Pleading innocent ? Slap on the wrist and a quiet “don’t do it again”. . .
Check out all the cases published today:
https://www.justice.gov/criminal/criminal-fraud/health-care-fraud-unit/2025-national-hcf-case-summaries