Kihei doctor pleads guilty to fraud

Owner of South Maui Clinic arraigned on charges in federal court

The Maui News

A Kihei doctor pleaded guilty Monday to charges including health care fraud for writing fraudulent prescriptions and submitting false claims for payment of medical services, according to federal court records.

Mark Lipetz, 50, owner and operator of South Maui Clinic, entered the pleas when he was arraigned in U.S. District Court in Honolulu.

He pleaded guilty to two counts of health care fraud and one count of acquiring a controlled substance through misrepresentation, fraud, forgery, deception or subterfuge.

According to court documents and information presented in court, Lipetz, a licensed physician, wrote multiple prescriptions for medications using the names and addresses of actual patients from January 2017 to June 2018.

“However, Lipetz did not intend to give the medications to the patients whose names appeared on the prescriptions,” according to a news release from the U.S. Attorney’s Office for the District of Hawaii. “Instead, Lipetz filled the prescriptions and used the controlled substances for purposes other than the legitimate medical treatment of his patients.”

Those purposes included giving the medication to other patients or creating a stockpile so he could give “trial samples” to patients, according to court documents. “In such cases, the patient for whom the medication was prescribed either never received the controlled substance at all, or received only a part of the total prescription . . . ,” according to a document.

In addition, Lipetz “engaged in a scheme to fraudulently obtain money from Medicare, Medicaid, Hawaii Medical Services Association and United Healthcare by submitting more than 200 false claims for reimbursement” between May 2014 and July 2018, according to the news release. “Each of these claims indicated that Lipetz had an in-person, face-to-face visit with a patient, when in fact the office visits never occurred,” the news release says.

Lipetz was paid $15,430 for 277 such fraudulent claims from May 2014 to July 2018, according to a plea agreement memorandum filed in court.

The document says false claims were filed for a patient identified as L.M. on May 31, 2017, to Medicare and on July 24, 2017, to HMSA. On March 31, 2017, Lipetz fraudulently obtained alprazolam, which is commonly known as Xanax and is used to treat anxiety, according to the document.

It says Lipetz routinely offered to submit prescriptions to a pharmacy and pick up medication for patients, in some cases delivering the medication to patients at home.

The false Medicare claim was submitted for payment of alprazolam, which Lipetz picked up for patient L.M. but didn’t give to or use to treat the patient, according to court documents. The false HMSA claim was for reimbursement of services requiring a face-to-face office visit when Lipetz was out of the country, according to the document.

As part of the plea agreement, Lipetz agreed that he will be barred from reimbursement for medical services under federal health care programs, including Medicare and Medicaid. He also agreed to permanently surrender his Drug Enforcement Administration controlled substance registration and to permanently refrain from prescribing or dispensing controlled substances.

In exchange, the government agreed not to file additional charges against Lipetz related to his distribution of controlled substances outside of the usual course of professional practice.

Lipetz is scheduled to be sentenced Dec. 5 by U.S. District Judge Leslie Kobayashi.

The health care fraud charge carries a penalty of up to 10 years in prison and a fine of up to $250,000. As part of the plea agreement, the government agreed to recommend a lesser sentence for Lipetz.

He was released on a $25,000 unsecured bond.

Kenji Price, U.S. attorney for the District of Hawaii, said the office “will continue its quest to root out fraud in the health care industry by working with the Drug Enforcement Administration and other law enforcement entities dedicated to protecting patients.”

“Our health care system relies upon the candor of physicians and other professionals who care for the vulnerable in our communities,” Price said. “Lipetz’s fraudulent behavior unlawfully steered precious funds towards his pockets and away from health care providers who serve the most vulnerable in our communities.

“We will continue to aggressively pursue physicians and other medical practitioners who, unlike the overwhelming majority of their colleagues, choose to violate federal law.”

DEA Assistant Special Agent in Charge John Callery said the investigation of Lipetz is among several ongoing statewide “to shield our communities from the dangers of the opioid crisis that is crippling portions of the Mainland.”

Lipetz’s attorney, Cary Virtue, couldn’t be reached for comment Monday.


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