Health Clinic Owner Pleads Guilty to Workers’ Comp Fraud

The owner of a Houston health clinic pled guilty to insurance fraud after billing for medical services – often provided to injured employees – despite having no licensed medical staff at the clinic. Instead, investigators found that the clinic was using foreign medical students to provide care.

Rosemary Phelan, the owner of Rose’s Houston Healthcare Clinic, entered a guilty plea in Harris County Court and was sentenced to seven years deferred adjudication and ordered to pay $88,000 in restitution.

A joint investigation by the Texas Department of Insurance Division of Workers’ Compensation and Texas Mutual Insurance Company revealed that Phelan’s clinic had no licensed medical providers on staff yet continued to accept patients. She would then file fraudulent workers’ compensation claims to collect from insurers.

According to investigators, the clinic had a licensed doctor on staff at one time. When that doctor left in 2012, Phelan began hiring foreign medical students to act as doctors and treat patients.

Workers’ Compensation Commissioner Ryan Brannan said this case was particularly egregious. “Someone filing false claims is bad enough,” he said. “But this scam put people’s health at risk. It’s unconscionable.”

Phelan submitted $166,843 in fraudulent workers’ compensation claims, representing more than 50 injured employees, claiming they had been treated by the clinic’s previous doctor.

Phelan pled guilty to second degree insurance fraud and a felony charge of practicing medicine without a license. The investigation found that her clinic was supplying narcotics to patients using the credentials of doctors and physician assistants who no longer worked at the clinic without their knowledge.

You can report suspected cases of insurance fraud to TDI-DWC by calling the Consumer Help Line at 1-800-252-3439 or by visiting www.tdi.texas.gov/fraud/report.html. 

For more information, please feel free to ask Dr. Jimenez or contact us at 915-850-0900 .

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