Indian-origin doctor and businessman, the founder and former CEO of the now-defunct Sovereign Health Group, was recently arrested over $149 million medical fraud. The 61-year-old psychiatrist has been charged with four counts of wire fraud, one count of conspiracy and three counts of illegal remunerations for referrals to clinical treatment facilities.

What was the medical fraud? What was Sharma’s modus operandi?

Tonmoy Sharma’s Sovereign Health Group was a prominent addiction treatment provider throughout Southern California and several other states. According to court documents, the company billed private insurance companies for drug addicted and mentally ill patients at extremely high rates between 2014 and 2020. Sovereign used to pursue patients aggressively through various forms of marketing forcing them to get admitted to the company’s treatment facilities. The patients were told that their treatment would be paid by a foundation funded by the donations from former SDpvereign patients. There was no such actual foundation and it was a ruse for Sovereign employees. They obtained patients’ names, date of birth and Social Security numbers and then obtained health insurance coverage on their behalf while the patients remained in the dark. Sovereign employees sometimes pretended to be the patients when calling into these insurance companies. At Sharma’s direction, the court documents said, the employees claimed qualifying life events that had not happened in order to obtain new insurance outside the enrollment period and inflating or underreporting their income so the patients would qualify for Affordable Care Act government-subsidized private insurance instead of Medicaid, whose reimbursement rates were significantly lower than private insurers.Sovereign also paid more than $21 million in illegal kickbacks for patient referrals to patient brokers. Originally from Assam’s Dibrugarh, Sharma studied MBBS from Dibrugarh University. Sharma’s medical license was once revoked while he was practicing in the UK before he established his career in California.