Clinic Founder Accused of Bogus Billing : Investigation: Medical board says that Kent Lehman and 11 colleagues performed unneeded tests.

Calling it one of the state’s largest cases of medical insurance fraud, investigators for the Medical Board of California have accused Garden Grove physician Kent Lehman and 11 colleagues of profiting from unneeded testing and bogus billing.

The state attorney general Monday filed civil charges based on complaints by patients, insurance companies, the Orange County Medical Assn. and the board’s investigation of more than 50 cases recorded between 1986 and 1988.

Investigators allege that Lehman, founder of eight medical clinics in north Orange County, set up a system in which doctors earned as much as $100,000 over their $68,000 base salaries by receiving a percentage of laboratory tests they ordered.

“The classic MO at the Lehman Medical clinic is to go there for a cold and to walk away with $7,000 to $10,000 in tests,” said Kathy Schmidt, who has investigated the clinics for two years.

“Those accusations are not true,” Lehman said. “There was never any charges made for anything we had not done.” If there were truth to the allegations, he said, licenses would have been lost when the complaints arose four years ago.

An insurance investigator, probing the clinics independently, said one of Lehman’s clinics billed $24,000 in four months for an elderly woman who was basically “overweight, lonely and obese.”

In addition, the doctors are accused of “unbundling”--that is, charging separately for a series of chemical tests that are actually performed in a single automated process. They are also accused of charging for exams they did not perform.

The alleged bogus bills and unneeded tests may have run into millions of dollars, Schmidt said.

Schmidt said the 50 cases were “just a sampling” of the complaints they continue to receive every week. Moreover, Lehman’s case, while large, is not unique.

“On every street corner, there are little mini Lehman Medical clinics trying to do the same thing,” Schmidt said.

If the accused are found guilty, the medical board could revoke their licenses.