Virginia Beach psychiatrist sentenced for healthcare fraud scheme

Virginia Beach

A Department of Justice logo is shown on a podium during a news conference about Novartis Pharmaceuticals Corp., Thursday, Sept. 30, 2010, in Philadelphia. Federal prosecutors say drug maker will plead guilty to charges it marketed an epilepsy medicine for unapproved uses and pay more than $400 million in civil and criminal penalties. (AP Photo/Matt

NORFOLK, Va. (WAVY) – The U.S. Department of Justice says a Virginia Beach doctor was sentenced to 27 months in prison for defrauding Medicare, Medicaid, and Tricare, and other health care benefits programs out of hundreds of thousands of dollars.

According to the Department of Justice, 64-year-old Udaya K. Shetty agreed to pay more than $1 million to settle related civil claims.

Shetty was a licensed psychiatrist practicing medicine at his own practice, Behavioral & Neuropsychiatric Group, according to court records.

According to court documents, in 2013 Shetty created a system by which he could over-bill healthcare benefit programs by seeing patients for only five to 10 minutes but then billing for services that were on average 41 to 63 minutes long.

Shetty instructed his staff to often double, triple, or even quadruple book appointment times, said the Department of Justice.

The fraud became apparent when investigators discovered that on dozens of instances Shetty would need more than 24 hours a day of working to perform the services for which he billed.

Shetty closed his own practice and joined another psychiatric practice, Quietly Radiant Psychiatric Services in 2017. While at the practice, Shetty and one of his former employees, Mary Otto, engaged in a similar scheme.

The DOJ says although other Quietly Radiant staff members were responsible for billing, Shetty directed Otto to access the billing system and change all of his billing data to a higher billing rate.

Shetty and Otto defrauded various healthcare benefit programs of more than $450,000.

Otto pleaded guilty for her role in the scheme and was sentenced to 15 months in prison on Jan. 10.

Officials say in regards to the civil settlement, Shetty agreed to pay nearly $1.08 million to the United States and the Commonwealth of Virginia to resolve his liability under the False Claims Act and the Virginia Fraud Against Taxpayers Act for submitting or causing the submission of false claims to the Medicare, Medicaid, and TRICARE programs.

Stay with for updates.

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