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Former Eastern Kentucky Pain Clinic Owner Pleads Guilty to Defrauding Medicaid

Wednesday, 05 01, 2013

Shelley Catharine Johnson
Deputy Communications Director
502-696-5659 (office)

Attorney General Jack Conway today announced the guilty plea of a former Eastern Kentucky pain clinic owner to charges he defrauded the Medicaid program. Dr. Lee Balaklaw entered an Alford Plea in Lawrence Circuit Court on April 26, 2013 and pled guilty to 10 misdemeanor counts of theft by deception under $300. Circuit Judge David Preston sentenced Balaklaw to 12 months in jail on each count to run concurrently. The sentence was suspended for two years providing that the defendant pays restitution in the amount of $140,105, which includes more than $135,000 in restitution to the Kentucky Medicaid program.

Additionally, Dr. Balaklaw, an anesthesiologist from Louisa, Ky., is excluded from participation in all federally funded health programs, including Medicaid and Medicare, for a period of at least five years pursuant to federal regulations.

The investigation and resulting prosecution was conducted by General Conway's Office of Medicaid Fraud and Abuse Control.

"I appreciate the hard work of my investigators and prosecutors in bringing this case to a successful close," General Conway said. "I am pleased that we've recovered money for a vital state program and excluded Dr. Balaklaw from participating in the Medicaid program."

A Lawrence County grand jury indicted Balaklaw for Medicaid fraud in October of 2011 following an investigation into his billing practices at Anesthesia Associates of Louisa, P.S.C. The indictment accused Balaklaw of intentionally or wantonly submitting fraudulent and false claims to Medicaid by claiming he treated multiple patients using pain treatment injections into the tendon. The investigation showed Dr. Balaklaw was actually performing another injection treatment which entitled him to a smaller reimbursement from Medicaid. The charges allege that from January 2007 through July 2010, Balaklaw fraudulently billed $90,000 for the 29 patients included in the indictment.

The case was referred to the Attorney General's Office by the Department of Medicaid Services.

Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded more than $300 million for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.

In 2012, General Conway's Medicaid Fraud Unit was named one of the most aggressive in the country by the nonprofit watchdog group Public Citizen.