Indian-origin US doctor fined $2 million for healthcare billing fraud

Houston-based Indian-origin pain medicine specialist Dr Ajay Kumar Aggarwal has reportedly agreed to pay over $2 million (approximately ₹17.4 crore) to settle allegations of healthcare fraud, according to US authorities.

The 63-year-old doctor and Medley Compounding Pharmacy LLC, which he operates, have collectively paid $7.96 million to resolve claims that they improperly billed the US Department of Labor’s Office of Workers’ Compensation Program (DOL-OWCP). Federal investigators found that the claims related to compounding creams, gels, and pain patches were for treatments neither medically necessary nor beneficial to patients.

Authorities said that Dr Aggarwal, who owns and operates A A Texas Anesthesiology Back Pain Center, issued prescriptions for unnecessary compound pain medications to injured federal employees. Medley Pharmacy, formally owned on paper by Aggarwal’s wife, filled the prescriptions. The pharmacy began billing DOL in 2013, a year after it opened.

The fraud came to light through a whistleblower lawsuit filed under seal in October 2017 by a former Medley employee. The whistleblower claimed to have witnessed patients receiving unwanted and excessive medications by mail, often without ever meeting Aggarwal. Medley employees were allegedly directed to auto-refill prescriptions monthly using pre-printed prescription pads, bypassing medical assessments.

US Attorney Alamdar S Hamdani called the conduct ‘particularly egregious’, stressing that healthcare providers in federally funded programmes have a duty to deliver legitimate and safe treatments. Officials said the significant penalty serves as a warning to others who might exploit government health insurance programmes.

Jonathan Ulrich, Special Agent in Charge at the US Postal Service Office of Inspector General, stated that the settlement reflects the commitment of law enforcement to root out fraud, waste, and abuse in federal programmes.