Major Medical Chain Pleads Guilty, Repays Texas Mutual $6.5 Million

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Feb 10, 2015, 01:05 ET

AUSTIN, Texas, Feb. 10, 2015 /PRNewswire/ -- Texas Mutual Insurance Company and the Travis County District Attorney reported today that Nova Healthcare Management, headquartered in Houston, Texas, entered a plea of guilty to felony workers' compensation fraud related charges in the 147^th Judicial District Court in Austin, Texas. Presiding Judge Clifford Brown accepted the plea and assessed sentence in the case.

According to the court documents, Texas Mutual's investigation revealed that Nova Healthcare Management, also known as Nova Medical Centers, or Nova, overbilled Texas Mutual for physical therapy by billing services as more expensive one-on-one physical therapy when what it provided was group therapy.

Under the plea agreement, Nova has withdrawn from Texas Mutual's Texas Star Network, repaid $6.5 million to Texas Mutual and paid a $5,000 fine. Other provisions of the agreement include court costs and mandatory compliance reporting to the Special Prosecution Division of the Travis County District Attorney's office for the next two years.

Texas Mutual worked closely with the District Attorney to ensure a speedy and equitable resolution of the case. District Attorney Rosemary Lehmberg had this to say about the case resolution:

"I'm pleased that the corporation has taken responsibility for the fraudulent billing, and repaid the money. This type of fraud causes all Texas employers to pay higher premiums. These are complex cases to investigate and prosecute, and justice has been served by returning the $6.5 million in overbilling to Texas Mutual."

The Nova investigation was a part of the Texas Mutual zero-tolerance-for-fraud policy. Texas Mutual maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.

Left unchecked, misrepresentation of health care services and other workers' compensation health care fraud schemes can lead to higher premiums for all Texas employers.

About Texas Mutual Insurance Company
Austin-based Texas Mutual Insurance Company, a policyholder-owned company, is the state's leading provider of workers' compensation insurance. Texas Mutual provides coverage to 40 percent of the market, representing over 60,000 companies, many of which are small businesses. Since 1991, the company has provided a stable, competitively priced source of workers' comp insurance for Texas employers. Helping employers prevent workplace accidents is an important part of Texas Mutual's mission.

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Media contact:
Terry Frakes
senior vice president of public affairs
(512) 224-3855
[email protected]

SOURCE Texas Mutual Insurance Company