New Orleans Psychiatrist Sentenced to 87 Months for Medicare Fraud

Written by Staff | January 21, 2009

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A New Orleans psychiatrist was sentenced to more than seven years in prison for her role in a healthcare fraud scheme, according to a news release from the U.S. Attorney's Office for the Eastern District of Louisiana.

U.S. District Judge Mary Ann Vial Lemmon also ordered Maria Carmen Palazzo, MD, to pay $655,260 in restitution to the Medicare and Medicaid programs she defrauded.

In 2005, a New Orleans grand jury found grounds to charge Dr. Palazzo with healthcare fraud, and in June 2007, the U.S. Attorney in New Orleans charged her with 55 counts of healthcare fraud and falsifying information in a clinical trial of the drug, Paxil, in children and adolescents.

Dr. Palazzo was convicted of billing Medicare for services she did not deliver to patients at Touro Infirmary in New Orleans through the hospital’s Psychiatric Hospital Partial Hospitalization program.

She also allegedly submitted false bills to Touro for consulting and medical director services between 2000 and 2005. In April 2008, Touro Infirmary agreed to pay $1.75 million in a civil settlement to resolve charges stemming from Dr. Palazzo’s billing schemes. The government alleged that the not-for-profit Touro benefited by receiving money from Dr. Palazzo’s billing schemes to which it was not entitled. Touro paid without admitting legal wrongdoing.

Read the news release from the U.S. Attorney's Office on the New Orleans psychiatrist Medicare fraud.

Read the Dr. Palazzo indictment, hosted by the Citizens for Responsible Care and Research (pdf).

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