UNIONVILLE, Mo. — The former CEO of the Putnam County Memorial Hospital pled guilty to a federal fraud charge last week.
David Lane Byrns was the CEO of the Putnam County Memorial Hospital in 2017, when the Missouri State Auditor’s Office reported a scheme that produced $90 million in fraudulent lab billings at the hospital.
The findings came during a routine audit of the county hospital. Ultimately, it unveiled a nationwide scheme that has since brought civil suits against him, and other individuals and companies associated with him.
On Sept. 26, federal prosecutors charged Byrns with conspiracy to commit health care fraud in Missouri. He pled guilty on the same day. Sentencing will occur later in Florida. Byrns faces up to 10 years in prison and a $250,000 fine.
Prosecutors said Byrns used Putnam County Memorial Hospital as a pass-through, reporting the 15-bed rural hospital was performing lab tests for patients around the country. Around December 2016, prosecutors say under the direction of Byrns and his associates the hospital began billing for laboratory tests despite the hospital not having a working laboratory. In mid-February 2017, the hospital did begin conducting some laboratory screenings on site.
The tests in question, however, were of patients with no connection to Putnam County Memorial Hospital. Many of the tests, prosecutors say, weren’t medically necessary. Claims were submitted as though the tests were conducted on patients of the hospital.
Between October 2016 and February 2018, insurers paid at least $114 million to Putnam “based on materially false and fraudulent claims,” court documents say.
Prosecutors seek $5.1 million that they say Byrns personally collected from the billings.
“This all began with our audit of a small county-owned hospital. Our work helped expose a nationwide conspiracy that led to these federal criminal charges,” Missouri State Auditor Nicole Galloway said. “Health care fraud impacts costs for all Missourians and underscores the importance of holding those responsible accountable.
“Over the past two years, my office has worked with law enforcement throughout the nation to ensure that those responsible for these crimes are punished.”
The charging information filed by prosecutors references two individuals and three companies that were not named.