Jacksonville, Fl. Clinic Owner Charged with Billing Fraud

April 2, 2003

A Jacksonville man surrendered today to fraud investigators with the Department of Financial Services on a charge that he collected more than $100,000 in insurance payments for MRI scans that he couldn’t have performed, given he was operating from a rental mailbox location.

Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services and the department’s Division of Insurance Fraud, announced that Leon Todd McClerren, 41, operator of Simpson Diagnostics, has been charged with schemes to defraud, a first-degree felony. If convicted, McClerren could face up to 30 years in prison. The Office of Statewide Prosecution will prosecute the case in the Fourth Judicial Circuit of Florida.

“The cost of every fraudulent claim — whether it is inflated or totally fabricated – that gets paid by an insurance company eventually gets passed on to consumers through increased premiums and increased costs for services,” Gallagher said.

McClerren established a corporation in the name of Simpson Diagnostics and then used a rental mailbox address for his corporation’s billings, investigators said. Several medical providers referred patients to Simpson Diagnostics for MRI scans, but Simpson Diagnostics directed the patients to Damadian MRI/First Coast for the service at a prearranged price of $450 per MRI scan. Once the documentation for claims filing was received from Damadian MRI/First Coast, investigators said, claims were submitted to insurance carriers as though the MRIs were performed by Simpson Diagnostics. The insurance companies were charged $1,250 per MRI.

The investigation of Simpson Diagnostics began in October 2000 when State Farm Insurance Company reported to the Division of Insurance Fraud that they were suspicious of the address on a claim from Simpson Diagnostics, because the address was that of a rental mailbox operation. Based on that information, division investigators determined that Simpson Diagnostics had billed numerous insurance companies for MRI scans.

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