Former Texas health system CEO charged in $1.2B fraud crackdown

The former CEO of Little River Healthcare was among 36 defendants across the U.S. charged in criminal cases for their alleged involvement in fraudulent telemedicine, durable medical equipment and cardiovascular and cancer genetic testing fraud. 

Jeffrey Paul Madison, Rockland, Texas-based Little River Healthcare's former leader, was indicted for conspiracy to commit illegal remunerations in violation of the Anti-Kickback Statute. Federal prosecutors allege he participated in a scheme that involved paying physician kickbacks in exchange for referrals to critical access hospitals and an affiliated lab. 

Little River Healthcare closed all of its facilities in December 2018, including two hospitals and several medical clinics. At that time, health system leaders attributed the shutdown to the inability to find new owners for the facilities and "unfortunate financial conditions."

Little River Healthcare laid off 298 workers when it closed. 

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