State Journal Register
Springfield psychiatrist agrees to pay $908,000 to settle federal civil complaint
November 8, 2016
By Dean Olsen
A Springfield psychiatrist whose medical license was taken away by the state for ethical violations has agreed to pay the federal government $908,000 to settle allegations that he falsely billed Medicare and Medicaid.
Duttala Obul Reddy, 66, allegedly submitted bills for services provided at central Illinois nursing homes from January 2008 through February 2013, but the care either wasn’t provided to patients at those facilities or “had not been provided to the extent claimed,” according to news release issued Tuesday by U.S. Attorney James Lewis’ office.
The bills involved alleged services to residents of nursing homes that included Liberty Village in Pittsfield, Prairie Village in Rantoul, Mason City Nursing Home, Heritage Manor in Gillespie, Beverly Farm in Godfrey and North Church Rehabilitation in Jacksonville.
As part of the agreement to settle the 2015 civil complaint against Reddy, he denied that he submitted false claims, but Reddy agreed to pay the $908,000 judgment entered by U.S. District Court Judge Sue Myerscough.
Reddy also agreed to be excluded for 10 years from the Medicare and Medicaid programs, as well as all other federal health care programs. That means he will be barred from being reimbursed by those programs for the care of patients.
Reddy’s attorney, D. Peter Wise, said Reddy admitted to his office incorrectly coding some bills. Reddy “acknowledged the problem and agreed to the settlement to resolve the case,” Wise said.
Wise said negotiations to settle the federal civil case weren’t influenced by Reddy’s October 2015 discipline by the Illinois Department of Financial and Professional Regulation.
At that time, Reddy was suspended from the practice of medicine for at least two years, retroactive to Dec. 30, 2014, for engaging in a “boundary violation” with a patient of his practice. Reddy’s middle name was listed as Obula in state disciplinary documents.
The 2015 suspension was connected with Reddy’s temporary suspension in January 2015 while he was working at Psychiatric Associates of Central Illinois, 1124 S. Sixth St., Springfield.
The January 2015 temporary suspension and the October 2015 suspension involved Reddy’s alleged sexual misconduct with a patient who previously was victimized by “sexually inappropriate” conduct at the hands of another psychiatrist at Psychiatric Associates, Dr. Kripakaran Puvalai, according to documents from the state.
The documents indicated that Reddy exchanged emails from September 2013 to October 2014 with the patient that violated doctor-patient boundaries. The documents also stated that Reddy “engaged in multiple sexual encounters” with the patient at his office and at other Springfield-area locations.
The patient attempted suicide several times during that period, state officials said.