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BY TOM LATEK, Kentucky Today

A two-year investigation has led to federal health care fraud charges against the owner of rehabilitation facilities in eastern Kentucky.

Eugene Sisco III, 35, of Pikeville, the owner of several rehabilitation facilities in Pike, Floyd and Harlan counties, as well as a urine drug testing lab in Pike County, is accused of illegally charging patients cash for services that were covered by Medicaid and for which he had been fraudulently billing Medicaid.

According to a federal indictment, it is alleged that Sisco has received over $3,000,000 in cash paid to him by patients seeking treatment for addiction between 2016 and 2018.  Federal search warrants were executed on five of Mr. Sisco’s businesses in February of 2020.

When questioned by employees at the facilities about having the patients pay cash, since the services were under Medicaid, the indictment states Sisco would lie and say services such as counseling or urine drug testing were not covered by Medicaid.

The indictment accuses Sisco of charging patients $200-$300 for the same services for which he was also billing Medicaid. He is also alleged to have charged the Medicaid members $225 per month for counseling services, for which he was also billing the federal agency, as well as for urine drug tests for a company he owned, which again were also submitted to Medicaid for payment.    

Sisco was indicted by a federal grand jury on one count of federal wire fraud, which carries a maximum of 20 years in federal prison, as well as health care fraud, which has a maximum of ten years in federal prison if convicted.

This was a joint investigation by Appalachia Narcotics Investigations, Diversion Enforcement Task Force, the FBI HEAT Task Force (All Appalachia HIDTA Task Forces) and the United States Attorney’s Office in Lexington. They were assisted by the Kentucky State Police, Harlan County Sheriff’s Office, Harlan Police Department and the Kentucky Office of the Attorney General Medicaid Fraud Control Unit.

Sisco is scheduled to be arraigned Dec. 7 at U.S. District Court in London.