TRENTON - Attorney General Anne Milgram and Criminal Justice Director Gregory A. Paw announced that a Mercer County neurologist and his former office administrator pleaded guilty to conspiracy today for fraudulently billing nine insurance companies more than $470,000.
According to Insurance Fraud Prosecutor Greta Gooden Brown, Dr. Alan E. Ottenstein, 51, of Washington Crossing, Pa., and his former office administrator, Jean Woolman, 58, of Morrisville, Pa., pleaded guilty to third-degree conspiracy to commit theft by deception before Superior Court Judge Mitchel E. Ostrer in Mercer County. The corporation owned by Ottenstein, Lawrenceville Neurology Associates, P.A., which had offices on Princeton Pike in Lawrenceville, pleaded guilty to second-degree conspiracy. The guilty pleas stem from a state grand jury indictment obtained by the Office of Insurance Fraud Prosecutor in December 2005.
Third-degree crimes carry a maximum sentence of five years in state prison and a fine of $15,000. As part of the plea agreement, Ottenstein will be required to sign consent judgments for restitution and civil insurance fraud fines totaling $500,000, and his firm will lose its corporate charter. The state agreed not to object to Woolman’s entry into the Pre-Trial Intervention program, subject to approval of the court and conditioned on her payment of a $10,000 civil fine and permanent forfeiture of her Pennsylvania real estate license.
At the guilty plea hearing, Ottenstein admitted that he falsely billed insurance companies in several ways. Ottenstein admitted that he billed for certain treatments – treatments used for back injuries commonly claimed by auto accident victims – as surgical back procedures when, in fact, non-surgical, mechanical traction procedures were used. In addition, he admitted that he billed for use of medical supplies known as sterile trays in connection with epidural injections when, in fact, sterile trays were not used, and that he wrongfully billed for an additional “facility fee” for epidural injections when regulations prohibited billing such fees in the circumstances.
Among the insurance companies falsely billed by Ottenstein were Aetna, AmeriHealth, Health Net, Horizon Blue Cross Blue Shield, MetLife, New Jersey Manufacturers, The Oxford Plan, State Farm and Zurich Insurance. Based on the Office of Insurance Fraud Prosecutor’s investigation, Ottenstein wrongfully billed approximately $477,000 to these companies.
The investigation was coordinated by the Division of Criminal Justice - Office of Insurance Fraud Prosecutor, which investigates and prosecutes both civil and criminal insurance fraud cases. State Investigators Allan Buecker and Scott Naismyth, Civil Investigators Donna Augustyniak and Craig Leschner, Analysts Terri Drumm and Terri Worthington, and Deputy Attorney General Steven Farman were assigned to the investigation. Additional investigative assistance was provided by New Jersey Manufacturers Insurance Company and Special Agent John Vella of the U.S. Department of Health and Human Services.
“When health care providers commit fraud, it is particularly disturbing, because the integrity of the health insurance claims process depends on the trustworthiness of the licensed professionals involved,” said Insurance Fraud Prosecutor Brown. “I would like to thank New Jersey Manufacturers Insurance Company for its invaluable assistance, as well as the other insurance companies that initiated civil proceedings in this case and assisted in the criminal investigation.”
The defendants are scheduled to appear before Judge Ostrer on May 8 to be sentenced.
Prosecutor Brown noted that some important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline 1-877-55-FRAUD or visiting the Web site www.njinsurancefraud.org. State regulations permit an award to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.
The Office of Insurance Fraud Prosecutor was established by the Automobile Insurance Cost Reduction Act of 1998. The office is the centralized state agency that investigates and prosecutes both civil and criminal insurance fraud, as well as Medicaid fraud.
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