On February 14th, 2019

LA Podiatrist Arrested for Alleged Fraudulent Billing and Kickback Scheme More than $360,000 loss to the insurer

LOS ANGELES— On February 13, 2019, the California Department of Insurance (CDI) announced the arrest of licensed podiatrist, Schlomo Schmuel, 53, of Sherman Oaks.  Schmuel self-surrendered to CDI detectives on two felony counts of fraud after allegedly inflating bills, and billing for services not rendered or not medically necessary. The alleged billing scheme resulted in a loss to an insurer of more than $360,000.

“Licensed medical professionals who commit insurance fraud cannot hide from California Department of Insurance detectives and investigators,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  “They have proven time and again their dedication to thorough investigations that lead to successful prosecutions.”

Schmuel operated two businesses, Innovative Orthopedic Solutions and Diamond Orthopedic Services. While running these two businesses, Schmuel allegedly billed for a hot/cold water unit, also known as a Vital Wrap System, using two combined Healthcare Common Procedure Coding Systems (HCPCS) codes. The hot/cold unit, used to reduce pain and swelling after undergoing surgery, is a single component and requires only one HCPCS code. By using the two different codes, Schmuel allegedly inflated the invoices and billed for services not rendered.

Department investigators allege Schmuel was also involved in an unlawful kickback scheme where he paid to have the hot/cold water unit prescribed to injured workers, despite it not being medically necessary. Schmuel allegedly paid a “marketer” $100 for each unit that was prescribed by another medical provider who treated the injured workers with the unit provided by Schmuel.

Schmuel was booked into the Clara Shortridge Foltz Criminal Justice Center. The Los Angeles County District Attorney’s Office is prosecuting this case.


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