Physical therapist gets 3-1/2 years in prison for $3.8M fraud

A federal judge sentenced a man who operates a physical therapy clinic in Aiea to 3-1/2 years in prison Thursday for overbilling his clients’ health insurers by nearly $3.8 million.

Garrett Okubo pleaded guilty in April 2018 to health care fraud. Since then he and his lawyers had been haggling with the goverment over the amount of the loss from the the fraud.

In addition to handing down the prison term, U.S. District Chief Judge J. Michael Seabright ordered Okubo to pay $3,796,207 in restitution, more than $3 million of it to Tricare, the health insurance program for U.S. military members, their dependants, qualified survivors and retirees. The other victims were HMSA, Medicare, Medicaid and WellCare.

Okubo must pay $150,000 of the restitution within the next 90 days and the rest at a rate of 10% of his gross income after he completes his prison term.

Much of the overbilling was due to Okubo charging for care performed by employees who were not licensed physical therapists. Only Okubo had a license.

Okubo charged for treatment provided when he was out of state and inflated the length of treatment provided. Seabright said the FBI conducted surveillance and found that in one case, Okubo charged a patient for 90 minutes of treatment when the patient was at the clinic for only 26 minutes.

Seabright said from January 2011 through June 2017, Okubo billed his patients’ insurers $8.2 million. The government estimates if Okubo provided 12 hours of treatment per day during that period, the most he could have billed is $5.7 million.

Okubo told Seabright he takes full responsibility for his actions. He said he is now the only one in his clinic who provides treatment and he has instituted a sign-in/sign-out log to track the length of treatment he provides.

His lawyer Rick Sing said Okubo has helped a lot of people for a long time and had many referrals.

Assistant U.S. Attorney Marc Wallenstein told Seabright that the health care industry relies on the honesty of providers. He said he hoped Okubo’s sentence will encourage other providers who are committing fraud to stop and discourage others from starting.

In January, another judge sentenced Sheila Harris to 70 months in federal prison for charging Tricare hundreds of thousands of dollars for speech language therapy that was never provided at her Honolulu and Aiea clinics.