EL PASO, TX — Two men surrendered to the FBI in El Paso last week after being federally charged in a multi-million-dollar healthcare fraud scheme involving false billing for urine drug tests.
According to a June 25 indictment, Jose Huerta, 58, CEO of two Long-Term Acute Care hospitals in El Paso, and 47-year-old Israel Navarro of Dallas who owned one of the hospitals and had financial ties to the other, conspired to submit false insurance claims to Blue Cross Blue Shield. The claims alleged urine drug tests (UDTs) were conducted on patients at their hospitals and processed through a Dallas-area lab. According to the justice department's news release, "none of this was true."
Over a six-month period, Huerta and Navarro submitted $16 million dollars in claims for the laboratory testing of UDTs. The actual loss to Blue Cross Blue Shield attributed to Huerta’s and Navarro’s alleged fraud scheme totals more than $12 million.
Navarro, a resident of Puerto Rico and the Dallas area, voluntarily surrendered to the FBI on July 22 and was released on a $150,000 bond. Huerta surrendered the following day, made his initial appearance on July 24, and was released on a $50,000 bond.
Both men are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit mail fraud. If convicted, they each face up to 20 years in prison and a $250,000 fine per count.
Huerta's attorney, Ryan Downton, shared the following statement: "This matter is purely a contractual dispute between Blue Cross and two El Paso hospitals. We are disappointed that Blue Cross has attempted to weaponize the Department of Justice to bring criminal charges in a purely civil matter -- especially after Mr. Navarro and Blue Cross collaboratively resolved similar allegations against other hospitals."
The case is being investigated by the FBI and the Texas Department of Insurance. Assistant U.S. Attorney Debra Kanof is prosecuting the case.
