Huntsville businessman pleads guilty to health care fraud, receiving kickbacks

TUSCALOOSA, Ala. (WAFF) - Two men pleaded guilty to charges in related cases involving multi-million-dollar healthcare fraud conspiracies on Thursday.

James Ray, 51 of Gadsden pleaded guilty to one count of conspiracy to commit health care fraud. Ray owned a company through which he marketed healthcare items and services to medical providers that was named Integrity Medical, LLC.

According to the U.S Department of Justice, Ray’s plea agreement stated that between 2012 and 2018, he conspired with others to pay and receive kickbacks to induce medical providers to issue medically unnecessary prescriptions and order medically unnecessary goods and services.

The prescriptions and services were then billed to Medicare and other health insurers. One of those services was electro-diagnostic testing provided by a Huntsville-based company called QBR, or Diagnostic Referral Community. Ray received per-patient payments from QBR for inducing medical providers to order tests from QBR.

The owner of that company was John Hornbuckle, 52 of Huntsville. Hornbuckle pleaded guilty to one count of conspiracy to commit healthcare fraud and one count of conspiracy to receive kickbacks.

According to the plea agreement for Hornbuckle, QBR billed insurers for electro-diagnostic testing that its technicians performed, regardless of where there was a medical need for them. Hornbuckle caused QBR to pay medical providers a per-patient fee for the tests that ordered from QBR that were reimbursed by insurers.

The payments were disguised as hourly payments for the time of the provider and the provider’s staff, but the provider was actually paid a fee per patient who received a test.

The Ray-Hornbuckle case is also attached to another case that convicted a Tennessee doctor and his wife earlier this year.

Dr. Mark Murphy, 65 and his wife Jennifer Murphy, 65 owned and operated North Alabama Pain Services. Their locations in Decatur and Madison closed in early 2017.

According to evidence presented in their trial, it shows that the Murphys took kickbacks from QBR totaling more than $1 million.

In return, Dr. Murphy would order electro-diagnostic testing from QBR for his patients, whether they needed them or not. Before the Murphys trial 41-year-old, Brian Bowman of Attalla pleaded guilty to healthcare fraud conspiracy.

According to Bowman’s plea agreement, he marketed QBR’s electro-diagnostic testing to medical providers and was paid for each test they ordered. From that Bowman received nearly $1 million from QBR. Bowman and the Murphys are still awaiting sentencing.

The maximum sentence for kickback conspiracy is 5 years in prison and the maximum for health care fraud conspiracy is 10 years in prison.

Sentencing dates for Ray and Hornbuckle have not been scheduled yet.

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