Highland doctor pleads guilty to federal charge of health care fraud

Lizzie Kaboski, The Times, Munster, Ind.Times

HAMMOND — A Highland-based ear, nose and throat doctor who cheated multiple insurance providers out of millions dollars has pleaded guilty to health care fraud, federal court records show.

Dr. Bethany Cataldi, of Chesterton, admitted via plea agreement that she fraudulently billed Medicare and six private insurance companies a total of more than $22 million for single-use devices used in nasal medical procedures she didn't complete, court records show. She is the owner of the Center for Otolaryngology and Facial Plastic Surgery in Highland.

The plea was filed June 20 and accepted at a court hearing Thursday by United States District Court Judge Gretchen Lund. Lund scheduled Cataldi's sentencing hearing for Oct. 30, according to federal court records. Cataldi faces a maximum sentence of 10 years in prison. Additional charges against her will be dismissed following her sentencing.

As part of her agreement with the government, Cataldi is ordered to pay the $22 million amount in restitution to Medicare, the unnamed private insurance companies and her patients who sustained financial losses as a result of her conduct, even though she was not directly indicted for the conduct that caused the losses to the private companies and her patients. More than $550,000 of the funds Cataldi stole were from patients who owed co-pays through their private insurance providers, according to the plea.

Cataldi was indicted Nov. 20 on charges of health care fraud, falsifying health care statements and money laundering related to allegations she submitted more than 1,500 claims to Medicare for reimbursement on individual balloon sinuplasty and inflation devices that between March 2015 and December 2023, despite purchasing a significantly fewer number of devices during that time, according to a federal indictment. Records from a California-based medical device manufacturer identified in documents as "Company A" shows Cataldi purchased approximately 100 of each device from their company between 2015 and 2023. Each sinuplasty device is worth $1,100 and each inflation device is worth $75, the indictment said.

However, Cataldi allegedly sought $16.5 million in reimbursement from Medicare during the eight-year period and was paid approximately $9 million for the fraudulent claims. At least one of the procedures was billed to Medicare even before Cataldi ordered her first device back in 2015. She billed the various private insurance companies for the remaining millions, according to court records.

The money was sent directly to a bank account controlled exclusively by Cataldi, according to the indictment.

The devices are used for a surgical procedure to expand the nasal passages on patients who may have chronic sinusitis, according to the Cleveland Clinic. The single-use devices, cleared by the Food and Drug Administration, have not been approved for sterilization between patients, the indictment said. Medical providers must order one device per procedure and then discard it.

The indictment said investigators spoke to at least eight of Cataldi's patients whose names she wrote in multiple separate statements billed to Medicare. Some patients said she had never performed the procedure on them, despite the mention of their names in countless documents.

GALLERY: The Times Photos of the Week

Check out the Times' picks for the best images from the past week.