MONTGOMERY - Ed Henry, who was the chief strategy officer for the Java Medical Group, managing Lakeland Community Hospital as well as the now-former interim administrator for Lakeland, is no longer affiliated with any of Lakeland’s operations, after a federal indictment was handed down against him concerning health care fraud, conspiracy to commit money laundering and paying and receiving kickbacks related to Medicare. The indictment, handed down Thursday, June 7, charges Henry, 47, also an Alabama representative, with one count conspiring to pay kickbacks and to defraud the U.S., one count of conspiring to commit health care fraud, one count of conspiracy to commit money laundering, five counts of health care fraud and six counts of paying unlawful kickbacks, reports indicate. According to the indictment, count 1 of defrauding the U.S. and paying and receiving kickbacks, related to events dating back to July of 2015, and continuing to June of 2017 in Montgomery County. Defendant Henry, the indictment reads, did willfully and knowingly combine, conspire, confederate and agree with others known and unknown to commit offenses against the United States. The object of this conspiracy to defraud the U.S. the indictment continued, by impairing, impeding, obstructing and defeating through deceitful and dishonest means the lawful government functions by knowingly and willfully offering and paying renumeration including kickbacks and bribes, directly and indirectly, in cash and in-kind to any person to induce such person to refer an individual to a person for the furnishing, arranging for the furnishing of any items, and service for which payment may be made whole or in part under a federal health program known as Medicare. Also mentioned in the indictment was Gilberto Sanchez, a primary care physician licensed to practice medicine in Alabama. Sanchez on Nov. 28, 2017, pleaded guilty to conspiring to distribute a controlled substance, health care fraud, according to wording in the indictment. From an unknown date until about 2013, Sanchez was co-owner of a medical practice which opened as Family Practice, being the sole owner from 2013-2017, the indictment reads. Henry, according to the indictment, worked from 1997-2002 for an international appliance manufacturer as a medical device sales representative, the indictment further reads. Around July 2015, Henry formed a corporation for the purpose of providing services to primary care physicians, according to the indictment. From about March 2016-June of 2017, Henry’s corporation provided services to Family Practice according to an oral and written contract, the indictment indicated. Henry also created the company MyPractice 24, Inc. for the purpose of providing chronic care management services to Medicare Part B beneficiates through contracts with physicians and medical practices, the indictment indicated. Around December of 2015, Henry approached Sanchez about MyPractice24 entering into a contract with Family Practice to provide chronic care management services, the indictment added. Henry, according to the indictment, offered Sanchez the following terms: 1) MyPractice24 would charge Family Practice a substantially lower rate, $18 per patient per month, than the rate of $22.60 per patient per month Company A was charging Sanchez; 2) Due to this reduced, rate, Family Practice would be able to afford to waive copay obligations for all patients who did not have secondary insurance providers, regardless of whether the patient was actually indigent or otherwise could not afford the approximate $8 per month copay and; 3)MyPractice24 would only bill Family Practice for services that were fully or partially reimbursed by CMS, regardless of whether My Practice24 was or was not responsible for the non-payment of a service, the indictment pointed out. For example, if a patient had not met his or her deductible for a year and CMS did not pay for services provided to that patient, Henry would not bill Sanchez for the provision of services to that patient, the indictment stated. Thus, Sanchez would not be required to collect deductibles from patients, it added. Henry further proposed that each month, employees of his company would send to Family Practice billing office a list of patients for whom MyPractice24 had provided at least 20 minutes of chronic care management services during the previous month, the indictment noted. The billing office would use that list to submit claims to CMS, and by submitting these claims, would use a certain code and falsely report the actual charge as including the copays, the indictment pointed out. Doing so would cause CMS to wrongfully conclude that Family Practice had collected the copays, where Family Practice would not have, in most instances, collected the copays, the indictment reads. Sanchez, according to the indictment, accepted all of Henry’s terms. Among the kickbacks were direct payments to a member of the staff, free chronic care management services, free medical billing services and free clinical services unrelated under the provisions for chronic care management services, reports indicated. Money laundering charges relate to Henry allegedly using proceeds of health care fraud to make payments to Sanchez’s staff members, they added. Henry Claims Innocence Henry explained to the Alabamian he was innocent of the charges against him. “I’ve always been as open and transparent as possible,” Henry stated. “For the last eight years, I have fought the government from further encroachment on our Freedoms. “Today began my fight with the federal government for my freedom,” Henry added.“So while I would like to lay everything on the table for all to see, that would not be wise while fighting an opponent that has endless resources like our government. “My goal was to help patients and I did,” Henry continued. “Using a program established and promoted by Medicare, I helped chronically ill patients and saved the taxpayers’ money. “For that, I have been charged with multiple felonies. I am not guilty of any crimes,” Henry concluded. News Comes as Shock to City Officials News of the indictment against Henry has come as a shock to officials both in the city of Haleyville and Winston County. Henry was working as chief financial officer for the Java Medical Group, which manages operations at Lakeland hospital. The hospital is under the ownership of the Haleyville/Winston County Healthcare Authority. “On behalf of the city of Haleyville and the mayor’s office, I want to express our concern for the charges handed down against Representative Ed Henry,” Haleyville Mayor Ken Sunseri expressed in a prepared statement. “The allegations are related to a company he owned prior to his involvement with Java Medical Group, LLC, which currently works with the health care authority to manage Lakeland Community Hospital,” Sunseri continued. Henry is no longer involved with any of the operations of Lakeland hospital, the mayor assured. “We want to see that none of the allegations involve Java Medical, Lakeland Community Hospital or the health care authority of Haleyville and Winston County Alabama,” Sunseri continued. “The Lakeland Community Hospital nurses, staff, physicians, hospital board and our city are committed to insuring that we all have the finest care possible for the men, women and children of our community.” Java has named Martha McCormick to serve as the interim administrator of Lakeland, replacing Henry, until a permanent replacement is named, according to the news release. Council Members Give Reactions Some Haleyville council members expressed their thoughts and concerns on Henry’s indictment. “Ed doesn’t have any affiliation or ties that jeopardize anything in hospital operations, from the Java management side,” council member Jonathan Bennett stated. “I don’t think it will affect Lakeland’s business whatsoever,” Bennett added. “I am really shocked, to be honest with you,” council member Drew Thrasher said. Although the indictment had no affiliation with Java, Lakeland or the health care authority, Drew commented, “It looked bad on the hospital, city, everybody. “At the same time, I think they have done a very good job of handling it in the timely manner they have and getting Lakeland as far away from the situation as they can.” “I really didn’t know anything about it,” said council member Richard Bittinger. “I didn’t even know he was involved in another company.” The Haleyville council voted several months ago to approve a one cent increase in the sales tax and usage tax for the purpose of paying back the $1.5 million loan also approved for the purchase of Lakeland by the healthcare authority, and for related expenses. Concerns Expressed from County Commission “Anytime that anybody is indicted it is always a concern,” pointed out Winston County Commission Chairman Roger Hayes. “Of course, he pleaded not guilty to 14 or 15 counts. From my understanding also, what I checked into...what had happened was a company (Henry) had in 2015 to 2017, and it did not involve Java,” added Hayes. “We don’t have a contract with Java. We have one with the health care authority. We’re in a lawsuit over whether we can collect the tax or not.” Hayes was referring to a lawsuit filed by Rusty Banks because of the two mill hospital tax voted in by a majority of the commission in order to fund health care services for Winston County. The lawsuit stresses that the county voters should have had the right during an election to decide if the tax should be effective. The county commission based their decision on an opinion they received from the Attorney General’s office. Commissioner David Cummings and Hayes voted for the two mills, but Commissioner Bobby Everett voted no. Hayes said the tax would begin to be collected October 1, pending a court ruling on the lawsuit. “The county commission cannot give money unless it is a sustainable and a viable hospital,” Hayes stressed. “If the taxes come through and we get the tax money, it is spelled out in there what we can do with the hospital money. The hospital has got to be running. It can’t be sitting there and be inoperative. It has to be a productive type hospital,” Hayes continued. “What Henry has been accused of has nothing to do with the Haleyville hospital or the taxes,” Hayes emphasized. Henry, according to the U.S. Attorney's Office, pleaded not guilty at an arraignment on Thursday, June 7, and was to be released on bond that day. Trial is current set for October. *When a defendant is charged with a crime, the charge is merely an accusation until or unless proven guilty in a court of law.
See complete story in the Northwest Alabamian.