Houston Surgeon Indicted on 21 Counts of Fraud

May 6, 2003

Dr. James Ghadially, owner and operator of Houston area Gulf Coast Orthopaedic & Spine Associates, was indicted on 21 counts of fraud. Each count carries a maximum of five years in federal prison and a $250,000 fine.

Federal agents arrested Ghadially and brought him before U.S. Magistrate Judge Frances Stacy last week for arraignment. According to U.S. Attorney Michael Shelby, Ghadially’s clinic specialized in work-related injuries, and Ghadially knowingly inflated his bills by charging for the services of an assistant surgeon.

The Texas Workers’ Compensation Commission Medical Fee Guideline states that surgeries that require an assistant surgeon are eligible for an extra 25 percent reimbursement. To qualify for the additional money, assistant surgeons must be licensed to perform the surgical procedure, and they must assist with at least 70 percent of the procedure.

Ghadially allegedly used a podiatrist, Dr. Joseph Mechanik, to assist him with surgeries to the spine, neck, back and shoulders. Mechanik reportedly did not have privileges as an assistant surgeon at the medical facilities where the surgeries occurred, and his medical license limited his practice to surgeries of the foot and ankle.

Of the 21 counts of alleged fraud, 13 involved bills that Ghadially reportedly sent to Texas Mutual Insurance Company.

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