Six-month sentence for Twin Cities acupuncturist accused of cheating Medicaid out of nearly $1.7M

An acupuncturist has received a six-month sentence and was handed a hefty restitution bill on allegations that she cheated Medicaid out of nearly $1.7 million while running clinics throughout the Twin Cities.

Xiaoyan Hu, 62, of Eden Prairie, was sentenced in Hennepin County District Court after pleading guilty to felony counts of aiding and abetting theft in connection with defrauding the medical assistance program for more than four years until mid-2020 while operating clinics in Minneapolis, St. Paul, Edina, Burnsville and, briefly, Elk River.

Another 13 aiding and abetting counts were dismissed as part of the plea agreement between the defense and prosecution.

Judge Peter Cahill chose to set aside a sentence of 3¾ years and opted for Hu to serve 180 days in the county workhouse along with five years’ probation. He also ordered her to pay more than $500,000 in restitution.

Investigators alleged that Hu’s Chinese Acupuncture and Herb Center (CAH) submitted nearly 42,000 fraudulent claims for clinic services and received close to $1.7 million in Medicaid payments. She also was accused of collecting more than $62,000 from Medicaid for fraudulent interpreter services.

State Medical Board of Practice records show that Hu’s license expired in October 2023. She had been licensed to practice acupuncture in Minnesota since 1998.

Hu earned her bachelor’s degree in 1983 from Hubei University of Chinese Medicine in Wuhan, China, according to board records. A biography on her company website added that she has a doctorate in traditional Chinese medicine, with specialties in gynecology and internal medicine.

From March 4, 2016, through June 25, 2020, Hu routinely directed CAH employees to bill for one hour of acupuncture services, even though sessions lasted no longer than 30 to 45 minutes, with many ending after 15 minutes.

The former employees said that when they challenged Hu about this, she rebuffed them and said to continue documenting services as one hour. Some former employees said they quit over the billing practices.

Investigators also found that the clinics billed for months — and on one occasion years — after clients stopped receiving services at the clinics.

CAH also billed for acupuncture services provided in a client’s home without required prior authorization for a home visit, used acupuncture billing codes to bill for services that were not covered acupuncture services, and used the credentials of another acupuncturist to bill for services provided to clients with a particular insurance company after the company excluded CAH from its network.