Two Area Entities Defrauded Out Of Health-Care Dollars

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The Hocking-Athens-Perry Community Action Agency and O’Bleness Memorial Hospital have been listed by federal prosecutors in the Northern District of Ohio as losing nearly $500,000 in a health care scam.

The Community Action Agency has been listed as losing $384,574 and O’Bleness Hospital  $91,877.

Robert Hartenstein, 61, has been charged Thursday with  seven counts of theft in a federal indictment in the Northern District of Ohio.  He has been accused of stealing more than $1.5 million from health care plans that he administered over a 10 year period.

Hartenstein is accused by prosecutors of spending the money on “bonuses, operating expenses, luxury car leases and a country club membership.”

According to the indictments, Hartenstein created Professional Benefits Association (PBA) as a third-party administrator of health care benefits.  Hartenstein was the majority owner, CEO, and chairman and secretary of the board of directors.

“PBA had several clients that were companies which sponsored self-funded health care benefit plans for their employees.  These companies hired PBA and paid it a fee to administer their benefit plans,” the United State Attorney’s office states.

 Federal law requires each client to have a separate account.  However between 2000 and 2010, Hartenstein is accused of co-mingling the funds with PBA’s operating accounts and spending the money for PBA salaries, bonuses, luxury vehicles and other entertainment.

Prosecutors claim that Hartenstein was not able to pay the medical service provider claims “for which the companies had already provided funds to PBA.”  There were shortfalls and Hartenstein is accused of not notifying the companies of those shortfalls.

“He misled PBA clients about the status of payments and why claims had not been paid,” prosecutors accuse.

In addition to the Hocking-Athens-Perry Community Action Agency and O’Bleness Memorial Hospital, five other entities were bilked out of funds including Lordstown Schools and the Joseph Badger Local Schools.

The losses to the two Athens area entities comprise 32 percent of the total money taken.