Robert M. Maughon, a former medical doctor and allergy-treatment fraudster once labeled a potential flight risk by Assistant U.S. Attorney Bart Slabbekorn, wasn’t given any more chances to make good on the federal prosecutor’s prediction, according to court documents.
U.S. District Judge Pamela Reeves on Friday remanded Maughon, 64, into custody after sentencing him to 63 months in federal prison. Reeves ordered Maughon to pay $3.6 million in restitution, the amount associated with the fraudulent billings to TennCare, Medicare and a small number of private insurance companies – conspicuously Blue Cross Blue Shield.
Maughon, who was jailed briefly after tampering with a potential trial witness, had remained free prior to his six-hour sentencing in federal court in Knoxville. Maughon, who owned FirstMed urgent-care clinic in Morristown, will have to serve more than 53 months before he will be eligible for supervised release.
The former doctor serially provided “free” allergy treatment – drops meant to be administered under the tongue – for everyone who could show an insurance card, primarily low-income, potentially vulnerable people covered by TennCare insurance, according to court documents.
Maughon’s road team, which appeared at the Grainger County Tomato Festival and similar venues, never met a patient of any age who didn’t need allergy drops, a treatment that was not approved by the Food and Drug and Administration and could not be billed legally to insurance companies. As soon as Maughon had the patients’ insurance information, however, the billing bonanza began.
Looking back, while Maughon started with small festivals and fairs, appearances that generated numerous complaints, it’s easy to conclude that Maughon’s attempt to take his fraud to the Morristown City Center was a critical turning point in the federal prosecution.
Maughon booked a stall at a health fair for city employees in 2014, one year after the fraud began. What resulted was more than $200,000 in bills for allergy treatments that nobody wanted, according to Assistant City Administrator Larry Clark.
When Clark forwarded the bill to BCBS, the city’s insurance carrier, it arrived with conclusion that every billing was the product of fraud. While reports from the tomato festival and similar places came in drip-drip fashion from individual policy holders, the word from city government was a raging torrent from a credible source.
Maughon, who was previously sanctioned for over-prescribing painkillers, did not go quietly in the criminal case. He was granted three continuances, one after he filed a plea agreement. Maughon’s former billing manager, who cooperated with federal prosecutor, confronted him about fraudulently billing for a treatment that isn’t FDA-approved, to no avail.
“(Maughon) chafed at her labeling his actions fraud (although she was exactly right) and he blamed his hatred for the insurance industry as his excuse for ‘trying to steal every dollar I can get,” the federal prosecutor wrote.
“It is clear from the defendant’s practice habits that he has cared only about convincing insurance companies to pay him for caustic substances rather than treating people for their maladies.”
To accomplish the fraud, Maughon allied himself with a pharmacist once convicted of fraud. The pharmacist supplied the drops for $69. Maughon billed insurance companies $840, except in cases where he could get more, according to Slabbekorn.
“When a provider … fraudulently takes resources that do not belong to him, he jeopardizes the solvency of the entire program,” the federal prosecutor concluded. “Health-care providers and fly-by-night pharmacies must know that regulations will be enforced.”
The federal judge recommended that Maughon serve his time at a low-security prison in Montgomery, Alabama or Pensacola, Florida.