Courts

In North Texas, Elite Healthcare Owner Sent to Prison Over Insurance Fraud and Kickbacks

Steven Berglund and four others have been sentenced over a scheme involving fraudulent lab reports and kickbacks.
Steven Berglund and four others have been sentenced over a scheme involving fraudulent lab reports and kickbacks. Jericho / Wikimedia
Editor's note, 4/15/2022: This story was updated to clarify Palo Pinto Hospital's role in the scheme.

Another day, another healthcare grifter bites the dust.

On Tuesday, a North Texas healthcare company owner was sentenced to prison over fraud charges, according to a press release issued by the U.S. Department of Justice in North Texas.

U.S. Senior District Judge Terry Means handed down two years to Steven Berglund, who owns Elite Healthcare, for a conspiracy in which he and others pocketed proceeds and facilitated financial kickbacks.

Berglund and the others, who were previously sentenced, had organized what prosecutors called a “pass-through billing” scheme. They then had the Palo Pinto General Hospital foot the bill for lab tests that were, in fact, conducted by out-of-network labs. Palo Pinto General is located in Mineral Wells, about 80 miles west of Dallas.

According to prosecutors, Berglund, Elite Healthcare co-owner Aaron Cerpanya, former Palo Pinto CEO Harris Brooks, MedHealth Solutions cofounder Adam Gardner and MedHealth Solutions cofounder Cody Waddell “submitted more than $54 million in laboratory services claims,” which led insurers to pay Palo Pinto upward of $8 million.

On top of kickbacks, Berglund and the others divided the left-over proceeds, federal authorities say. (Kickbacks are when healthcare providers or physicians exchange compensation for referrals from other medical providers or entice patients via compensation or payment.)

Cerpanya and Gardner will each serve a year and a day in prison, Waddell 18 months, and Brooks will serve five years of probation. Altogether, they have to pay $2.4 million in restitution.

Berglund had pleaded guilty in November 2021, although he later tried to reverse his plea by claiming that the trial had been so stressful that he suffered from “diminished mental capacity,” according to the DOJ.

In recent years, healthcare fraud was the “largest source of illicit funds in the U.S.,” topping more than $110 billion in 2018, according to the National Money Laundering Risk Assessment.

In late March, 10 Texas doctors and a healthcare executive agreed to pay more than $1.68 million to settle kickback allegations, the DOJ in East Texas said at the time. 
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Patrick Strickland is the news editor at the Dallas Observer. He's a former senior reporter at Al Jazeera English and has reported for the New York Review of Books, The Guardian, Politico EU and The New Republic, among others.