Sherman Oaks Podiatrist Arrested for Alleged Kickback Scheme

SAN FERNANDO VALLEY -- A podiatrist from Sherman Oaks with two West Hollywood practices has surrendered to California Department of Insurance detectives on two felony counts of fraud after allegedly inflating bills and billing for services not rendered or not medically necessary.

Authorities say that the actions of licensed podiatrist Schlomo Schmuel, 53, resulted in a loss of more than $360,000 to an insurer.

“This medical professional allegedly used his position of trust to have unneeded medical treatment prescribed to patients in order to scam hundreds of thousands from insurers,” Insurance Commissioner Ricardo Lara said in a statement.

Schmuel operated two businesses, Innovative Orthopedic Solutions and Diamond Orthopedic Services in West Hollywood. While running these two businesses, Schmuel allegedly billed for a hot/cold water unit, also known as a Vital Wrap System, using two combined Healthcare Common Procedure Coding Systems (HCPCS) codes. The hot/cold unit, used to reduce pain and swelling after undergoing surgery, is a single component and requires only one HCPCS code. By using the two different codes, Schmuel allegedly inflated the invoices and billed for services not rendered.

Department investigators allege Schmuel was also involved in an unlawful kickback scheme where he paid to have the hot/cold water unit prescribed to injured workers, despite it not being medically necessary. Schmuel allegedly paid a “marketer” $100 for each unit that was prescribed by another medical provider who treated the injured workers with the unit provided by Schmuel.

Schmuel was booked into the Clara Shortridge Foltz Criminal Justice Center. The Los Angeles County District Attorney’s Office is prosecuting this case.

Booking photo courtesy of California Department of Insurance