D CEO has learned that a key player in the Forest Park Medica Center scandal has secured an early release from federal prison. Richard Toussaint was freed on Jan. 18 through the Bureau of Prisons’ First Step Release program.
Toussaint once faced up to 70 years in prison but was sentenced to five-and-half years in 2020 for his role in the Forest Park matter while he was already serving time for another fraud charge connected to his private anesthesia practice.
Dallas-based Forest Park was a luxury hospital chain founded by Toussaint and bariatric surgeon Wade Barker in 2009. Frustrated with the bureaucracy of major health systems, the two set out to build a doctor-owned facility that served luxury clientele.
Physician-owned facilities cannot care for Medicare or Medicaid patients, so the hospital targeted privately insured individuals with lucrative out-of-network rates in posh ZIP codes. The brand received buy-ins from physicians up to $250,000 and had locations in Dallas, Southlake, Frisco, Fort Worth, San Antonio, Austin, and outside Kansas City, Kansas.
The hospitals featured spa-like decor, natural light, hardwood floors, art, and fountains. But the finances were never stable, and the partners were soon defaulting on their loans–all of them eventually ended up in bankruptcy (Read Matt Goodman’s in-depth story on the collapse here).
After federal investigators got access to the hospital’s books, Toussaint was indicted in 2015 for defrauding Blue Cross Blue Shield of Texas, UnitedHealthcare, and the Federal Employee Benefits Program for $10 million in bogus claims. He was convicted that year, and the Forest Park hospitals slowly shuttered and were purchased by other health systems (Medical City now owns the original Forest Park hospital on Central Expressway near Forest Lane).
Then in 2016, the federal government announced 21 more indictments detailing $40 million in kickbacks and other false claims. The $200 million fraud case was built around so-called marketing arrangements between the hospital and physicians, who were allegedly paid more for increased referrals to the facility, which is illegal.
Toussaint pleaded guilty after an indictment accused him of being on a private jet and elsewhere while allegedly treating patients. He volunteered to testify against his former partners in the trial.
Eleven defendants pleaded guilty before the trial began, with 10 trying their luck in federal court. Toussaint described how he and Barker launched the hospital for spinal and bariatric surgery patients and worked to attract out-of-network private insurance patients by paying off surgeons to refer their patients to have operations at Forest Park. Toussaint’s role in the trial helped the feds convict almost all defendants, who were sentenced to a combined 74 years in prison.
The prosecution’s approach was a novel one. Most fraud cases are pursued because federal payers like Medicaid or the military’s TRICARE programs are involved, but much of the fraud at Forest Park was against private insurance companies. Prosecutors successfully used the Travel Act, which was designed to stop organized crime and prohibits interstate or foreign travel or the use of mail to do unlawful activity.
Toussaint was already in prison for the previous fraud when he was sentenced to more than five years in prison and ordered to pay $82.9 million for his role in the Forest Park case. The two sentences were to be served concurrently.
Instead, Toussaint was released earlier this year via the bipartisan First Step Act. Passed in 2018, it requires the Attorney General to assess the risk for recidivism risk and reduce the federal prison population while maintaining public safety.
The act instructs the prison bureau to partner with nonprofits to help reentry and apply for state benefits. With good behavior, inmates can earn time credits toward pre-release custody. The bureau of prisons did not offer any specific information about why Toussaint was able to secure an early release.
Co-founder Barker, who pleaded guilty to kickbacks and bribes, is still serving time at a federal prison in Texarkana. He is scheduled for release in 2025.
Will is the managing editor for D CEO magazine and the editor of D CEO Healthcare. He’s written about healthcare…