Let’s start at the end – there is no “happy ending” here – at least not for the conspirators. The surgeon, Dr. David Morrow, lost his license. He is serving a 20-year prison sentence. His wife Linda will likely spend at least a decade behind bars. Both are in their early 70s. Their golden years are turning orange. 

The practice misrepresented medically unnecessary procedures as medically necessary and fraudulently billed federal and private insurers for millions. They did this several years before fleeing to Israel to avoid jail time. 

As you may have already guessed: Authorities found them. But there are lessons to be learned beyond the obvious. Let’s meet our “protagonists.”   

Linda Morrow is the former executive director of The Morrow Institute, a cosmetic surgery center in Coachella Valley, California. Dr. David Morrow worked at the practice as a cosmetic surgeon. Linda Morrow pleaded guilty to a health care fraud conspiracy in which she billed insurance companies between $25 million and $65 million for cosmetic procedures. 

The practice filed most of the fraudulent claims between 2007 and 2011. Judge Josephine Staton found the scheme’s losses exceeded $44 million.  

The practice targeted public employees with robust insurance coverage. Court documents cite an assistant principal who received lap band surgery (which could very well be “medically necessary” and covered) and a school counselor who received a nose job and a breast augmentation.   

The couple bundled procedures together to further entice potential patients – if a patient signed on for a breast augmentation, for example, she could get some Botox at a discounted rate.  

This made for a lucrative business model in the short term – and intensified the penalties when the authorities finally apprehended the Morrows since almost every elective (and otherwise not covered) procedure was miscoded as medically necessary. 

But the patients played a role in the scam as well – wittingly or otherwise. The Morrow Institute required patients to sign “testimonial letters” or public endorsements, most of which contained false statements relating to the quality of care or the type of procedure performed. 

The scheme depended on these false statements to work.  

The practice mislabeled tummy tucks as hernia repair or abdominal reconstruction procedures. They equated elective cosmetic rhinoplasties to procedures intended to correct a deviated septum. (Yes, sometimes those two procedures are done in one sitting, cosmetic plus medical, to minimize the need for two anesthetic sessions. But one procedure should be billed to the patient; the other to insurance.) You think “Patient A” got a traditional breast augmentation? No, no, no, you’re mistaken – that procedure corrected a tubular deformity. 

You get the picture.   

The Morrows coaxed employees into signing false documents. The Morrows (or other employees) then heavily altered said documents to disguise the elective nature of the procedures. Some patients received cash incentives. The more layers of this scam you peel away, the worse it stinks – like an onion.  

So, intentionally misrepresenting a procedure is fraud – 99.9% of doctors will never do this. But you can imagine a scenario where a doctor (or an employee or an electronic billing system) misrepresents a procedure or treatment in error. Doctors are not likely to suffer because of isolated mistakes, but routine errors like these create massive penalties when left unchecked. An auditor will look at such a practice and think, “These people are sloppy. What else is wrong?”  

Most doctors do not want to give auditors additional reason to probe their practice’s inner workings.  

Before this happens, audit yourself. Identifying errors in a vacuum gives you a chance to right the ship. And if you uncover coding deficiencies, create a record detailing your solution. 

What do you think? Let us know in the comments below. 

Jeffrey Segal, MD, JD

Chief Executive Officer and Founder

Dr. Jeffrey Segal, Chief Executive Officer and Founder of Medical Justice, is a board-certified neurosurgeon. Dr. Segal is a Fellow of the American College of Surgeons; the American College of Legal Medicine; and the American Association of Neurological Surgeons. He is also a member of the North American Spine Society. In the process of conceiving, funding, developing, and growing Medical Justice, Dr. Segal has established himself as one of the country’s leading authorities on medical malpractice issues, counterclaims, and internet-based assaults on reputation.

Dr. Segal was a practicing neurosurgeon for approximately ten years, during which time he also played an active role as a participant on various state-sanctioned medical review panels designed to decrease the incidence of meritless medical malpractice cases.

Dr. Segal holds a M.D. from Baylor College of Medicine, where he also completed a neurosurgical residency. Dr. Segal served as a Spinal Surgery Fellow at The University of South Florida Medical School. He is a member of Phi Beta Kappa as well as the AOA Medical Honor Society. Dr. Segal received his B.A. from the University of Texas and graduated with a J.D. from Concord Law School with highest honors.

In 2000, he co-founded and served as CEO of DarPharma, Inc, a biotechnology company in Chapel Hill, NC, focused on the discovery and development of first-of-class pharmaceuticals for neuropsychiatric disorders.

Dr. Segal is also a partner at Byrd Adatto, a national business and health care law firm. Byrd Adatto was selected as a Best Law Firm in the 2021 edition of the “Best Law Firms” list by U.S. News – Best Lawyers. With over 50 combined years of experience in serving doctors, dentists, and other providers, Byrd Adatto has a national pedigree to address most legal issues that arise in the business and practice of medicine.