Physician Innocent of Billing Fraud Charge 

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Law Feature – September 2012 

Tex Med. 2012;108(9):53-57.


By Crystal Conde 
Associate Editor 

Despite being embroiled in a nightmarish lawsuit that jeopardized his professional future and personal freedom, Khaled Jabboury, MD, describes his ordeal as "a message of love." The oncologist's devoted cancer survivors packed a Houston courtroom daily to support their embattled physician during his 10-day criminal trial on fraud charges last fall.

"It was a fight of good versus evil, and I stood strong every step of the way as the system tried to put me down and treated me like a criminal. I received a magnitude of support from the people I love – my patients, family, and friends. I gained strength and determination from my support system, and I'm grateful for that," Dr. Jabboury said.

Dr. Jabboury's problems began because his billing for the cancer drug Herceptin – widely used to treat aggressive HER-positive breast cancer – caught Aetna's attention. The insurer discovered in 2007 that he'd billed for Herceptin incorrectly for several years as though it came in a single-dose vial instead of a multidose vial. Dr. Jabboury incorrectly billed insurers for all 44 units of the vial but administered less than the whole vial. His attorney, Joel Androphy, says Dr. Jabboury thought the drug lasted only 24 hours (typical at the time for similar cancer drugs), requiring him to throw away any remaining portion.

Before Aetna detected the billing problem, Dr. Jabboury filed prompt pay complaints against the insurer with the Texas Department of Insurance (TDI) for delayed reimbursement. Mr. Androphy says Aetna and the doctor agreed to a civil settlement of the billing dispute and the prompt pay concerns.

But just when Dr. Jabboury thought the matter was resolved, he received a visit from a TDI Fraud Unit investigator. Unknown to Dr. Jabboury, Aetna had filed a complaint against him with TDI, and the department began investigating him in 2006. Once TDI began looking into the physician's billing of Herceptin more closely, Humana, United, and Blue Cross and Blue Shield of Texas – along with Aetna – levied charges of insurance fraud against him. The physician faced criminal charges and the possibility of jail time.

The insurance companies claimed Dr. Jabboury owed them $1.13 million in fraudulent charges. He and his attorneys contended the billing error was unintentional, not fraudulent activity.

TDI spokesperson Jerry Hagins says the agency wouldn't comment on the case, but the department's Fraud Unit receives few health care fraud complaints. For instance, he says only 3 percent of the 11,124 fraud reports received in 2011 involved health care fraud.

"Less than 1 percent of cases referred for prosecution involved physicians accused of health care fraud. Over the past three years, one physician was convicted on a second-degree felony related to workers' compensation fraud," Mr. Hagins said.

Not Guilty 

At trial, the state had to prove to the jury that Dr. Jabboury orchestrated a scheme to defraud insurance companies. In his closing statement, Mr. Androphy asked the jury to look into Dr. Jabboury's heart "and see that there is no deception there. There is compassion and a stubborn desire to fight cancer."

He said Dr. Jabboury never altered any patient medical records nor withheld any records when the insurers requested them.

"Dr. Jabboury … is a man totally focused and preoccupied with curing cancer. He is not a man preoccupied with cash," Mr. Androphy said during the trial.

Trial testimony revealed that Aetna's Medical Policy and Operations senior medical director originally determined Herceptin should be billed as a single-dose vial, which ultimately turned out to be incorrect.

Lt. Don McWhorter, an investigator in TDI's Fraud Unit, testified that he reviewed 17 of Dr. Jabboury's patient records during the inquiry into his billing of Herceptin but never examined the physician's prompt pay complaints against Aetna.

Prosecutor Martina Longoria painted Dr. Jabboury as "money-hungry" and motivated to defraud the health insurance system.

"For us to say that doctors are above the law, that because of his position in society, his status in society, we're not going to convict him of this offense would send the wrong message. It's shameful, it's unfortunate, but the person who brought us here today is Dr. Jabboury's conscious decisions …. You have afforded him the presumption of innocence, but now you know different," Ms. Longoria said in her closing statement to the jury.

It took the jury less than one hour to return a not guilty verdict.

Dr. Jabboury says he hopes his story will inspire Texas physicians to work to change the systems of investigation and prosecution for the benefit of physicians and patients.

"To me, it's very clear that the system is not adequate or fair. TDI ignored my complaint and took the other side. Physicians and patient access to care are vulnerable under the current system. My hope is that the system can be reformed," he said.

In July, TMA officials met with Cpt. Jeff Kirk, chief investigator for TDI's Fraud Unit, and Chris Davis, associate commissioner for fraud at TDI, to review the department's procedures for handling civil and criminal complaints. They explained to TMA's general counsel that they consult in-house experts and insurance company investigators in the rare event the department looks into a health care fraud case. They said they don't consult with independent certified coders and wouldn't commit to doing so in the future, according to TMA Vice President and General Counsel Donald P. Wilcox.

Contacted by Texas Medicine, Aetna Director of Communications for Texas Anjie Coplin said, "The billing issue Aetna had with Dr. Jabboury was resolved pursuant to a confidential settlement agreement between Aetna and Dr. Jabboury. We have no comment on the action that the State of Texas brought against Dr. Jabboury."

Lessons Learned 

Mr. Androphy says physicians can learn a valuable lesson from Dr. Jabboury's experience.

"In this instance, the civil attorneys did their job, but Dr. Jabboury should have consulted criminal counsel, as well. Any time a physician has an issue with an insurance company over the way he or she billed, I'd strongly advise obtaining the services of criminal counsel," he said.

Mr. Androphy says Dr. Jabboury may have avoided trouble if he had hired a criminal attorney during the civil settlement process because a criminal attorney "can add certain language in the release that would make it difficult for the other party to bring criminal charges against the physician."

Houston attorney Sarah Frazier, who also represented Dr. Jabboury at trial, says the likelihood of fraud coming into play is especially high when insurance companies determine physicians owe them a significant amount of money.

"When the dollar amounts are high [in this case more than $1 million], insurance companies may conclude it's more than a simple error and suspect the physician of wrongdoing," she said.

Mr. Androphy recommends physicians take billing and coding seriously and consult with a competent expert. (See "TMA's Coding Resources.")

"Spend the money. It's worth its weight in gold. Physicians need experts specifically trained on billing and coding for their specialties," he said.

 Crystal Conde can be reached by telephone at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by email. 

Legal articles in Texas Medicine are intended to help physicians understand the law by providing legal information on selected topics. These articles are published with the understanding that TMA is not engaged in providing legal advice. When dealing with specific legal matters, readers should seek assistance from their attorneys.  


TMA's Coding Resources 

TMA Practice Consulting offers evaluation and management (E&M) coding and documentation help that includes a review of claims, coding, and medical record documentation to determine whether the practice is following the coding guidelines for appropriate billing. An abbreviated checkup and a full review are available.

TMA Practice Consulting reviews a practice's documentation for: 

  • Accurate CPT coding, appropriate application of CPT coding guidelines, E&M coding guidelines, and the correct use of modifiers;
  • Accurate ICD-9 coding, appropriate application of ICD-9 coding guidelines, and documentation of medical necessity; and
  • Encounter forms, claims, and corresponding explanations of benefits to ensure accurate billing and reimbursement levels.  

TMA also offers an E&M coding and documentation training program for practices that need help understanding documentation guidelines or identifying inappropriate or inaccurate coding and weaknesses in medical record documentation. The two-hour session covers a review of 1995 and 1997 E&M documentation guidelines, time-based coding, modifiers, audit triggers, prolonged services, preventive medicine, and E&M utilization patterns, among other topics. Services are available for a fee based on a practice's needs.

For more information, call TMA Practice Consulting at (800) 523-8776, email  TMA Practice Consulting, or visit the TMA website to access all of TMA's billing and coding resources, plus other tools to make your practice run more smoothly.

TMA also published TMA Practice E-Tips Greatest Hits, Vol. 3: Coding. Available for free online, the publication contains helpful information and resources.

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Last Updated On

November 20, 2017

Originally Published On

August 20, 2012