Business
Former HMO officials indicted
NEWS IN BRIEF — Posted Dec. 12, 2005
Consultant Barry Scheur bought up struggling HMOs, promising to transform them into physician-friendly and patient-friendly health plans.
Instead, Scheur's plans, called The Oath, fell into financial ruin, and now he and two other former Oath executives are accused of lying about one affiliate's financial health.
A federal grand jury in Houma, La., on Nov. 18 indicted Scheur, Robert McMillan and Rodney Moyer on charges of one count apiece of conspiracy and mail fraud related to financial documents regarding The Oath of Louisiana filed with the state Dept. of Insurance between September 2000 and December 2000. If convicted, each could face a prison term of up to 10 years on the mail fraud charge and up to five years on the conspiracy charge.
Neither McMillan and Moyer, nor their attorneys, had responded publicly to the charges at press time. However, Scheur's attorney denied any wrongdoing by his client, a Massachusetts-based consultant who had worked as an HMO attorney and an HMO turnaround specialist before establishing The Oath.
According to U.S. Attorney Jim Letten, the documents claimed The Oath of Louisiana's net worth was high enough to cover potential claims from its policyholders.
By the time Louisiana placed the company under receivership in April 2002, its liabilities were $45 million greater than its assets, Letten said.
At that time, The Oath, with 82,000 members, was the state's third-largest HMO, and regulators estimated it owed hospitals, physicians and pharmacists up to $40 million.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2005/12/12/bibf1212.htm.
