Workers Comp

Second Louisiana doctor pleads guilty in comp kickback conspiracy

Louise Esola

March 30, 2022 Reprints

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An Alexandria, Louisiana, physician pleaded guilty Tuesday to having conspired to violate three different federal statutes in connection with a kickback scheme to defraud both federal and private workers compensation insurers, according to an announcement by the U.S. Attorney’s office of the Western District of Arkansas.

Dr. Robert Clay Smith, who faces up to five years in prison, waived indictment by a grand jury and pleaded guilty to a criminal information charging him with conspiracy to commit health care fraud, wire fraud, and illegal remunerations. He is the second doctor to plead guilty in a scheme involving pain creams.

Court documents allege that the basic premise of the scheme, which ran from 2013 until 2017, was that individuals associated with a Rogers-based medical supply and billing company recruited Dr. Smith to dispense pain creams and patches to his workers comp patients by offering him a split of the profits. The Rogers company acted as the billing agent for Dr. Smith, handling all the paperwork and submitting the allegedly fraudulent claims to both the U.S. Department of Labor, Office of Workers’ Compensation Programs, which covers all federal employees, and to private insurers as well.

In exchange, Dr. Smith admitted, the company paid him up to 55% of the profits collected from successfully billing insurers, at markups of 15 to 20 times what the medications actually cost.

According to court documents, Dr. Smith made more than $650,000 from the scheme. He admitted that in addition to receiving illegal kickbacks, he knew he did not have a license to dispense medications from his clinic, required under Louisiana law, and nonetheless bought topical medications from the Rogers company and dispensed them to his workers comp patients from his clinic.