A Rancho Mirage cosmetic surgeon pleaded guilty to a scheme to defraud health insurance companies by submitting bills for more than $3.4 million for procedures that he claimed were “medically necessary” but in fact were cosmetic procedures such as “tummy tucks”, “nose jobs” and breast augmentations.
In a plea agreement filed in United States District Court, Dr. David M. Morrow, 71, of Rancho Mirage, a cosmetic surgeon and dermatologist who was the owner of the Morrow Institute (TMI) in Rancho Mirage, admitted that he participated in a scheme to obtain money from insurance companies by false or fraudulent pretences, which included submitting altered documents to the insurance companies. Morrow admitted that cosmetic surgeries were billed to insurance companies under the pretence that the procedures were “medically necessary” so that insurers would pay for them.
Morrow also pleaded guilty to one count of filing a false tax return for 2008. Morrow admitted that he failed to report to more than $100,000 of income on his 2008 tax return and more than $1.5 million on his 2009 tax return.
Morrow, his wife, and TMI were charged in this case last fall when a federal grand jury returned a 27-count indictment that outlined a scheme in which patients were lured to the Coachella Valley surgery center with promises that cosmetic procedures would be paid for by their union or PPO health insurance plans. The victim health insurance companies included Anthem Blue Cross, Blue Cross/Blue Shield of California, Blue Cross/Blue Shield of Massachusetts, Regional Employer/Employee Partnership for Benefits, formerly known as Riverside Employer/Employee Partnership (REEP), and Cigna.
To trick insurance companies into paying for the cosmetic procedures, Morrow and others at TMI completely fabricated diagnoses such as a “hernia” in the patients’ official medical records. According to the indictment, they also fabricated test results and symptoms on medical records to cover up the actual medical procedures being performed – tummy tucks were fraudulently billed as hernia repair or abdominal reconstruction surgeries, rhinoplasties (“nose jobs”) were fraudulently billed as deviated septum repair surgeries, and breast lifts and augmentations were fraudulently billed as “tuberous breast deformity.” A document filed as part of Morrow’s plea agreement shows that TMI billed insurance as much as $150,750 for a single cosmetic procedure.
Morrow faces a statutory maximum sentence of 20 years of in federal prison for the conspiracy count and three years of imprisonment for filing the false tax return. Morrow is scheduled to be sentenced by United States District Judge Josephine L. Staton on September 23. Morrow has also agreed to pay full restitution to the victims. Charges against Morrow’s wife, Linda Morrow, 63, are currently pending.