Michigan Physician Indicted in Over $120 Million Fraud Scheme

February 28, 2020 Updated: February 28, 2020

The US Department of Justice announced in its press release on Feb. 26 that it was charging a Wayne County physician of defrauding Medicare and Medicaid worth for over $120 million.

Francisco Patino, 65, was charged with health care fraud, wire fraud, and money laundering. These charges were added to two counts of health care fraud and one count of conspiracy to defraud the United States from the original indictment (pdf).

Patino created the Patino Diet and sponsored mixed martial arts and the Ultimate Fighting Championship. He also owned or co-owned four healthcare businesses in Livonia and Detroit. All four companies were participating Medicaid and Medicare providers.

According to the indictment, Patino was the top prescriber of Oxycodone 30 mg in the state of Michigan from 2016 to 2017, dispensing more than two million “medically unnecessary” painkillers, including fentanyl. Some of these unnecessary and addictive drugs later ended up on the streets.

Patino is said to have required patients to go through unneeded facet joint (located on the spine) injections and other medical procedures before they were given their opioids. Medicare denied payments for the expensive injections and warned Patino that the injections violated its rules, but the indictment alleges Patino continued to administer them.

Patino also allegedly solicited kickbacks and bribes relating to his laboratory businesses. One co-conspirator, Joshua Burns, was also indicted (pdf) for receiving kickbacks from Patino for ordering urine drug testings.

Patino’s trial is set for April 7. If convicted, he can face up to 40 years in jail.

Generic Drugmaker Settles

The charges against Patino came one day after generic drug company Mallinckrodt Pharmaceuticals announced a $1.6 billion settlement over the company’s role in the opioid epidemic. The settlement, if approved, would end all lawsuits in the United States against the company.

England-based Mallinckrodt played a significant role in fueling the opioid crisis. The company “produced the vast majority of painkillers during the height of the overdose epidemic,” according to an Associated Press article.

Mallinckrodt incentivized its employees to sell as many opioids as they could, giving out six-figured bonuses and trips to Hawaii. Promoting that type of company culture, Mallinckrodt became one of the top corporations that produced prescription painkillers during the height of the opioid epidemic that claimed thousands of lives.

These same sales staff were also in charge of reporting any suspicious opioid sales that would alert authorities. According to one former Mallinckrodt employee in his deposition in 2018, employees were only incentivized to sell more, but not to report on questionable sales of its opioids.

Most of the $1.6 billion settlement will be put into a fund that will be used on programs to help in drug addiction recovery.