(The Center Square) — A federal judge sentenced Georgia’s former state insurance commissioner to more than three years in federal prison after pleading guilty to charges that he participated in a health care fraud scheme.
U.S. District Judge Steve C. Jones sentenced John W. Oxendine, 62, of Port St. Joe, Florida, to three years and six months in prison, followed by three years of supervised release. The former elected official must also pay $760,175.34 in restitution and a fine of $25,000.
According to federal authorities, Oxendine, Dr. Jeffrey Gallups and others referred unneeded tests to a Texas lab, Next Health, in exchange for kickbacks. Gallups previously pleaded guilty to health care fraud and was sentenced to 33 months in prison.
“Oxendine abused his position as the former Georgia Insurance Commissioner by undermining the integrity of the state’s health care system when he conspired with a physician to order hundreds of unnecessary and costly lab tests,” U.S. Attorney Ryan K. Buchanan said in a statement. “This case demonstrates our office’s commitment to work with our law enforcement partners to hold individuals accountable who prioritize personal greed at the expense of the public’s trust.”
Prosecutors say Oxendine, who served as insurance commissioner from 1995 to 2011 and was indicted by a federal grand jury in May 2022, gave a presentation at a Buckhead hotel and pressured doctors in Gallups’ practice to order unnecessary tests. Prosecutors said the company agreed to pay Oxendine and Gallups a kickback of half the net profit for eligible specimens that Gallups’ practice submitted.
According to the feds, Next Health later submitted more than $3 million in insurance claims for the unnecessary tests, and some patients also received bills of up to $18,000 for the tests. Insurance companies paid Next Health more than $750,000, which paid Oxendine and Gallups $260,000 in kickbacks.
According to prosecutors, Oxendine and Gallups had Next Health pay Oxendine’s insurance consulting business, Oxendine Insurance Services, to conceal the kickbacks. The feds previously said Oxendine used some of the money to pay debts for Gallups, including a $150,000 charitable contribution and $70,000 in attorney’s fees.
Prosecutors also said Oxendine told Gallups to lie after a compliance officer at Gallups’ practice raised concerns about the kickbacks and after federal agents questioned Gallups about Next Health.
