Attorney General Ellison charges doctor with $1.6M in Medicaid fraud

March 3, 2022 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has charged Dr. Xiaoyan Hu with defrauding Minnesota’s Medical Assistance (Medicaid) program out of over $1.6 million through her business, Chinese Acupuncture and Herb Center (CAH). Hu is charged by criminal complaint in Hennepin County District Court with 17 felony counts of theft by false representation.

“Minnesotans who receive Medical Assistance have a right to expect that they’ll receive all the care, dignity, and respect they’re entitled to. Minnesotans trying to afford their lives have a right to expect that every one of their tax dollars will be spent properly and legally. People who commit Medicaid fraud violate both of those rights. My office is working aggressively to hold them accountable and will keep doing so,” Attorney General Ellison said.

From March 4, 2016 through June 25, 2020, the charging period in this case, CAH operated throughout the Twin Cities, including in Edina, Minneapolis, St. Paul, and Burnsville. Hu, a licensed acupuncturist, owned the clinics, provided acupuncture services to clients herself, and supervised other acupuncturists and employees she hired to operate the clinics.

The Attorney General’s Office’s Medicaid Fraud Control Unit (MFCU) conducted a two-year investigation into CAH’s business practices. As alleged in the criminal complaint, Hu and CAH defrauded the Medicaid program by:

• Overbilling for acupuncture services. As found in the investigation, CAH regularly billed for 1 hour of acupuncture services, even though its acupuncture sessions lasted no longer than 30 to 45 minutes, with many sessions lasting as little as 15 minutes. Former CAH employees described a company policy of the clinic always billing for one hour of services at Hu’s knowledge and direction. The former employees said this was not the way other clinics they worked at billed for acupuncture services, and that they believed this was improper. These former employees stated that Hu directed them to enter their time in the clinic’s health records software as one hour regardless of how long they actually provided services. The former employees stated that when they challenged Hu about the propriety of this billing method, Hu rebuffed them and said to continue documenting services as one hour. Additionally, one of CAH’s former billers stated that Hu instructed her to bill for one hour of services. Some former employees described quitting because of CAH’s billing policies and Hu’s instructions.

• Billing for services not provided. The MFCU interviewed former CAH clients as part of its investigation. Some clients described going to CAH for a short period of time, yet when MFCU investigators reviewed CAH’s acupuncture billing, it found that the clinics billed for months — and on one occasion years — after the client stopped receiving services at the clinic.

CAH also billed for acupuncture services provided in a client’s home without the requisite prior authorization for a home visit, used acupuncture billing codes to bill for services that were not covered acupuncture services, and used the credentials of another acupuncturist to bill for services provided to clients with a particular insurance company after the company excluded CAH from its network. Hu also regularly signed, and directed others to sign, verifications for language interpreter services that did not happen.

A criminal complaint is merely an allegation. The defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated and prosecuted by the Medicaid Fraud Control Unit (MFCU) in the Office of Minnesota Attorney General Keith Ellison. The Minnesota MFCU receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $3,543,180 for Federal fiscal year (FY) 2022. The remaining 25 percent, totaling $1,181,059 for Federal fiscal year (FY) 2022, is funded by the State of Minnesota.