Louisiana Doctor Pleads Guilty to Workers’ Comp Fraud

On March 29, 2022, a Louisiana physician pled guilty to conspiring to violate multiple federal statutes in connection with a scheme to defraud both federal and private workers’ compensation insurers.

Robert Clay Smith, a family medicine physician, pled guilty in front of U.S. District Judge Timothy L. Brooks to having conspired to run a fraud scheme that ran from 2013 to 2017. Smith specifically pled guilty to conspiring to commit health care fraud, wire fraud, and taking illegal kickbacks as a part of this conspiracy.

Dr. Smith admitted that he dispensed pain creams and patches to his patients in exchange for receiving a split of the profits from a Rogers’ based medical supply and billing company. Dr. Smith also was reported to have made $650,000 from this scheme, and admitted that this company paid him approximately 50 to 55 percent of the profits collected from billing insurers.

Smith was the second doctor within the last two years to plead guilty to a conspiracy to commit fraud. The first was Robert Dale Bernauer, Sr., who pled guilty in July 2021 for similar charges as Smith. Dr. Bernauer practiced as an orthopedic surgeon and clinician in Louisiana. As a part of this conspiracy, it has been reported that Dr. Bernauer earned over $1,000,000 off of this scheme. In his plea agreement, Dr. Bernauer promised to immediately pay back all of the proceeds he fraudently grossed. Within 30 days of his plea, he paid back over $650,000 to the Department of Labor as restitution. Dr. Bernauer also acknowledged that he would be subject to additional payment at a later date upon his co-conspirator’s conviction.

Both Dr. Bernauer and Dr. Smith were solicited by the same company, which has been identified to be based in Arkansas. This unnamed company acted as a billing agent for both doctors, as the doctors dispensed pain creams and patches and the company billed insurers at markups of anywhere from 1,500% to 2,000%.

As a result of Dr. Smith’s guilty plea, he may be sentenced to up to 5 years in prison. This maximum sentence is consistent with Dr. Bernauer’s prospective sentence. Neither have been sentenced yet, as pre-sentence investigation is still ongoing.

Conclusively, the investigation surrounding these two doctors will likely serve as a reminder to treating providers, insurers, and claimants to be much more thorough in assessing injuries and treatment.