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September 1, 2014

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Dipak Desai indicted by federal grand jury in hepatitis C case

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Steve Marcus

Dr. Dipak Desai is taken into custody at the Regional Justice Center Thursday, March 17, 2011. Desai surrendered to authorities for treatment at the state’s Lake’s Crossing Center for the Mentally Disabled.

Updated Wednesday, April 27, 2011 | 5:26 p.m.

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Desai in Custody

Dr. Dipak Desai is taken into custody by court marshals Jason Dean, left, and Ric Moon at the Regional Justice Center Thursday, March 17, 2011. Desai surrendered to authorities for treatment at the state's Lake's Crossing Center for the Mentally Disabled. His trial on 28 criminal counts related to the 2007-2008 hepatitis outbreak has been delayed for a year. Launch slideshow »

A federal grand jury in Las Vegas handed down a criminal indictment today against Dr. Dipak Desai and his chief operating officer, Tonya Rushing, in connection with Southern Nevada's high-profile hepatitis C case.

Desai, who owned the Endoscopy Center of Southern Nevada, and Rushing were each charged with one count of conspiracy and 25 counts of health care fraud.

The indictment, released by the U.S. Attorney's Office, also states that Desai and Rushing should forfeit up to $8.1 million.

Rushing, 43, is scheduled to appear for arraignment May 6 before federal Magistrate Judge George Foley Jr., but arraignment of 61-year-old Desai has not yet been scheduled.

Desai became the central figure in a hepatitis C outbreak in Southern Nevada that was disclosed in 2008 and received national attention. The Southern Nevada Health District had linked nine hepatitis C cases to the reuse of syringes and other questionable medical practices at his endoscopy clinics.

But the district also said more than 100 other patients may have been infected, with the outbreak prompting health officials to recommend that 50,000 patients test for hepatitis B, hepatitis C and HIV.

Desai was indicted by a Clark County grand jury last year on 28 felony counts that included racketeering, performance of an act in reckless disregard of persons or property, criminal neglect of patients, insurance fraud, theft and obtaining money under false pretenses. Two other Desai employees, Ronald Ernest Lakeman and Keith Mathahs, also were charged.

In February, Desai was found by a Clark County district judge to be incompetent to stand trial and was ordered to seek treatment at the state's Lake's Crossing Center for the Mentally Disabled in Sparks.

Desai, who voluntarily surrendered his physician's license to the state in February 2010, specialized in gastroenterology. According to the indictment, he hired Rushing in 2000 to help him run the business side of his medical practice and in 2005 promoted her to chief operating officer.

Together, they are charged with systematically overcharging the federal Medicare program and other health insurance companies for anesthesia billing. They were accused of allowing the Endoscopy Center to "overstate significantly" the amount of time its certified registered nurse anesthetists spent with patients on a given procedure.

The indictment states that the fraud occurred at Desai's clinics on Shadow Lane and on Burnham Road.

Desai and Rushing were charged with instructing advanced practice nurses to list for billing purposes at least 31 minutes of anesthesia time on the records they maintained for each medical procedure even though the nurses "did not spend close to that amount (of) face-to-face time with the patient."

Desai also was accused of imposing "intense pressure" on employees to treat as many patients as possible on a given day. Because the clinics routinely performed anesthesia on 60 to 80 patients a day, the indictment concluded that nurses rarely spent at least 31 minutes with a patient.

The indictment also charged that Rushing owned a billing company, Healthcare Business Solutions, that paid Desai roughly $185,000 in 2006 or 2007 out of money she and the company earned for billing fraudulent anesthesia services.

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