Prominent Nashville Pediatrician and Former Owner of Centennial Pediatrics Pleads Guilty to Health Care Fraud
Agreements Includes 20-Year Exclusion from Federal Health Care Programs and More Than $1.6 Million in Criminal Restitution and False Claims Act Damages

NASHVILLE—Dr. Edward “Eddie” Hamilton, 54, of Nashville, Tennessee, and former owner of the medical practice of Centennial Pediatrics P.C., pleaded guilty yesterday in U.S. District Court to a misdemeanor count of health care fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. The plea comes as part of a global resolution of criminal and civil violations of the False Claims Act (FCA).

Pursuant to the criminal plea and civil settlement, Hamilton is excluded from participation in all federal health care programs for 20 years and is ordered to pay criminal restitution and FCA damages totaling more than $1.6 million.

Hamilton was also required to divest himself of his ownership of Centennial Pediatrics medical practice, and the sale of the Centennial Pediatrics’ assets was finalized on October 31, 2013. This resolution allowed for continuity of care for thousands of TennCare patients and other children who receive health care services from other physicians at Centennial Pediatrics.

“The penalties set forth in the plea agreement and the civil settlement should send a clear message to those who defraud health care programs, especially those programs intended to help our nation’s most vulnerable people-our children,” said U.S. Attorney David Rivera. “The terms of the settlement and plea agreement provide for a substantial penalty and allow necessary medical care to continue without interruption for thousands of Tennessee’s children.”

The global settlement resolves allegations by the U.S. and Tennessee that Dr. Hamilton, through Centennial, from about January 2007 through November 2012, knowingly upcoded billings for infant auditory screening exams to Tennessee’s Medicaid program TennCare and commercial insurance programs. Specifically, Centennial billed for the infant hearing exams that it performed at Baptist Hospital as comprehensive auditory exams, even though it only performed the less expensive auditory screens. The investigation revealed that Centennial did not even have equipment capable of performing the comprehensive tests for which it billed.

Also, according to the plea agreement, Hamilton admitted that through numerous Centennial clinics, he systemically billed for urinalysis testing as though its office had performed a microscopic examination of the sample despite the fact that no microscopy had been performed. Centennial upcoded its billings in this manner even though its clinics did not own or possess the microscopes necessary to conduct such examinations.

Hamilton also admitted in the plea agreement that he was told on multiple occasions and in writing by members of his staff, including his own audiologists, that the infant audiology service Centennial was billing was not being performed. Hamilton denied repeated requests from Centennial audiologists to purchase the diagnostic testing equipment necessary to perform the more comprehensive tests being billed. With respect to the fraudulent urinalysis, other Centennial physicians, including Hamilton’s medical director, notified Hamilton of the improper urinalysis billing at the Centennial pediatric clinics. Despite being advised of the improperly billed services, Hamilton directed that the higher reimbursement codes continue to be billed by his company.

“Medicaid fraud steals from the taxpayers and diverts precious resources from those who need it most,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services-Office of Inspector General in Atlanta. “This settlement will send a message to health care providers that they must provide to beneficiaries the services Medicaid has paid for and that the United States government will take seriously any failure to do so.”

“This plea is the result of the cooperation between the FBI and our law enforcement partners and reflects the long hours of investigation and hard work spent building a strong case,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the FBI. “Health care fraud is a priority for the FBI, and we will continue to target those who criminally manipulate the health care system for their own personal gain and make victims of us all.”

Mark Gwyn, Director of the Tennessee Bureau of Investigation, which houses the Tennessee’s Medicaid Fraud Control Unit, stated, “Fraudulent billing of Medicaid will not be tolerated. The TBI is committed to protecting the TennCare program, which is intended to support those who need the help. This case is yet another example of how state and federal investigators will work together to hold health care providers accountable, both civilly and criminally, for wrongfully billing TennCare.”

The criminal investigation and the joint federal and state civil investigation corroborated conduct originally alleged in a qui tam complaint filed pursuant to the FCA. The qui tam provision of the False Claims Act allows for whistleblowers, or relators, to file suit for violations of the act on behalf of the government. The relator is entitled to a percentage of the amount recovered by the government as a result of the information provided that resulted in the subsequent investigation and prosecution.

This matter was investigated by the Department of Health and Human Services Office of Inspector General, the FBI, the Tennessee Bureau of Investigation, the Tennessee Attorney General’s Office, and the U.S. Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorneys Lisa Rivera and Christopher C. Sabis.