A 39-year-old Honolulu man entered a not guilty plea in federal court Friday to allegations that he used unlicensed individuals to provide physical therapy and chiropractic services then faked claims that resulted in collecting more than $3 million in payments over a period of 4-1/2 years.
Stephen Timothy Wells owned and operated Ehukai Kapolei LLC and Healthcare Partners Inc., which did business on Oahu as Oahu Spine and Rehab. Wells had no medical training or other training related to health care, according to a Dec. 8 indictment charging him with seven counts of health care fraud and four counts of aggravated identity theft.
Wells is scheduled to go to trial on the charges Feb. 14 before Senior U.S. Judge Helen Gillmor. Wells remains free on an unsecured $50,000 bond. His attorney, Richard Sing, declined comment. Assistant U.S. Attorney Mohammad Khatib is prosecuting the case for the government.
Hawaii’s U.S. Attorney Clare E. Connors said in a written statement, “This indictment reflects the department’s commitment to investigating and prosecuting crimes involving false billings to public health programs and the improper provision of healthcare services to members of our community.”
Between July 2013 and Dec. 31, 2018, Wells allegedly submitted claims for payment for physical therapy and chiropractic services to TRICARE, Medicare, Veterans Health Administration and Hawaii Medical Service Association.
Federal prosecutors highlighted seven false claims allegedly made by Wells, six to TRICARE and one to HMSA, ranging from $152.70 to $315 as examples of services provided by unlicensed staff members. Among the unlicensed staff members tasked with providing physical therapy and chiropractic services were a massage therapist, an athletic trainer and a personal trainer.
In the cases of Medicare claims, which require a national provider identifier — a unique number issued by the Centers for Medicaid and Medicare Services —Wells allegedly used the name and NPI number of licensed practitioners when in reality they did not perform any of the work.
Wells allegedly used NPI numbers of 12 legitimate NPI holders to submit claims to health care benefit programs that falsely stated physical therapy and chiropractic services had been provided when unlicensed employees at Oahu Spine and Rehab performed the services. Wells allegedly used six different billing codes that detailed the kind treatment patients received.
He also allegedly provided “gifts and complimentary childcare” to patients as a means to encouraging them to frequent his business, thereby maximizing the count of fraudulent claims he could submit, according to the federal court documents.
His fake claims allegedly resulted in $3.3 million in payments to his company, according to federal prosecutors. Wells allegedly diverted money from those payments and used it to fund his lifestyle and other business ventures, according to the indictment. Wells, who was born in La Jolla, Calif., surrendered his U.S. and Canadian passport.
