California Woman Gets Prison for Defrauding Amtrak

A California woman was given a 30-month prison sentence this week in connection with a scheme to bilk Amtrak in fraudulent health care payments.

Guiqiong Xiao Gudmundsen, 53, also known as “Kimi” Gudmundsen, of Anaheim Hills, was convicted in connection with a scheme to defraud Amtrak for acupuncture treatments and other services that the Amtrak Office of Inspector General described as medically unnecessary or never provided.

The medically unnecessary procedures that were billed to Amtrak included massages and facials.

Amtrak was also billed for work-related injuries the company’s health care plan did not cover.

Gudmundsen, who was indicted by a California federal grand jury in October 2016, was the owner of Healthy Life Acupuncture Center.

U.S. District Judge Dolly M. Gee in Los Angeles ordered her to pay nearly $2.7 million in restitution to Amtrak.

A news release from the Amtrak OIG said investigators found that Gudmundsen deliberately targeted Amtrak employees in a “multifaceted and pervasive” fraud scheme and billed Amtrak’s health care plan for more than $7.1 million, about $3.8 million of which was deemed fraudulent, according to government estimates in a plea agreement.

The fraudulent billings were made during a nearly seven-year period between January 2008 and  December 2015.

Gudmundsen was accused of recruiting Amtrak employees to visit her acupuncture facilities in Riverside and Los Angeles.

The Amtrak OIG said she repeatedly billed Amtrak’s health care plan for services that were not performed or provided to people not covered under Amtrak’s plan.

In some instances services were double-billed to other insurance plans, or falsely billed in ways that would result in higher reimbursement rates.

The OIG said Gudmundsen’s bills were so frequent and costly that at their peak they ranked 32nd among all health care providers, exceeding Mount Sinai Medical Center in Chicago (No. 33) and Johns Hopkins Hospital in Baltimore (No. 39).

In December 2019, the OIG released an audit report that examined Amtrak’s internal controls for mitigating the risks of fraud in its payments to non-hospital facilities.

Auditors found that Amtrak continues to be exposed to potential fraud in its medical claims payments and has explored but not secured a capability to proactively analyze its payments for fraud.

In the report, the OIG found that there were 191 facilities that exhibited billing patterns indicative of fraud, but the company had not flagged the associated claims for further review. Because Amtrak is self-insured and pays medical claims from its operating budget, this put an estimated $57 million paid to these facilities at risk, according to the report.

Amtrak management agreed with the report’s findings and committed to working with its insurance claims administrator, Aetna, to identify fraudulent claims and seek recovery.

The Gudmundsen case also was investigated by the IRS Criminal Investigation; the U.S. Department of Labor, Employee Benefits Security Administration; and the U.S. Attorneys for the Central District of California.

The case was prosecuted by the latter agency.

In the plea agreement, Gudmundsen acknowledged that she regularly waived co-payments, co-insurance and deductibles for Amtrak healthcare plan participants, something the plan did not permit.

She also admitted in the plea agreement to funneling money received from Amtrak through bank accounts opened in the names of a shell company and her relatives.

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