A Brooklyn Park man has pleaded guilty in Hennepin County District Court to theft by false representation for defrauding the Medicaid program of nearly $200,000 while working at a Minneapolis physical therapy business. However, the plea deal calls for no prison time and grants him over 160 years to pay restitution.
Steven Carl Spoolman, 60, was charged in September with five counts of aiding and abetting Medicaid theft through filing false claims for services not eligible for Medicaid reimbursement and for overbilling for more services than were rendered. Charges alleged that nearly $200,000 was paid out on the false claims on various dates between September 2019 to October 2021.
Court documents describe an investigation that involved interpreters, non-emergency medical transportation drivers, and clinics that were involved in schemes of billing for rides, interpreting, and medical treatments that did not occur at all or did not occur as reported.
One of the clinics investigated was Southpointe Physical Therapy in Minneapolis. Spoolman’s LinkedIn page states that he was the director of physical therapy for the business from May 2015 to September 2021.
The charging document describes that various people affiliated with the clinic told investigators that the clinic would offer “free” massages at the end of physical therapy sessions to “make people happy.” Massages are not reimbursable by Medicaid. Based on a check of business records of services provided, investigators determined that Spoolman was billing for the massages by using an incorrect code, thus being reimbursed for massages that were not eligible for reimbursement. Other records showed overbilling for service hours that did not match Southpointe’s recipient logs.
For example, in one instance, Spoolman claimed he provided physical therapy and other services to 29 recipients, totaling 20.5 hours of service in one day. However, Southpointe’s handwritten recipient timesheet logs did not correspond to the billing hours Spoolman claimed. On another day, Spoolman billed for physical therapy services to 34 recipients, totaling 26.25 hours in one day. Again, the clinic’s recipient timesheet logs did not match the proper billing codes nor the times the recipients were at the clinic.
Investigators stated that the fraudulent Medicaid billing claims submitted by Spoolman totaled $199,696.70 over the approximately two-year time period.
Guilty plea
Under the terms of a plea agreement, Spoolman has agreed to plead guilty to one count of aiding and abetting theft over $35,000, with the remaining counts to be dismissed at sentencing at the end of this month.
The plea agreement calls for a stay-of-imposition on the felony sentence, meaning no prison time, and the conviction level will drop to a misdemeanor upon successful completion of five years’ probation.
The agreement calls for Spoolman to pay full restitution on the entire amount on all counts, with a minimum payment of $100 per month, giving Spoolman over 166 years to pay the balance, if minimum payments are maintained. The plea agreement also stipulates that if Spoolman makes at least the minimum payments each month for three years, he could petition to be released from probation at that time but would still owe the remainder of the restitution.
Spoolman may also be required to perform community service and maintain employment, although he is barred from working with Medicaid programs.
Spoolman is scheduled to be sentenced on Jan. 26, 2026. Spoolman was charged by summons and was never required to submit to booking, therefore, no booking photo is available. Spoolman’s case is being prosecuted by Minnesota Attorney General Keith Ellison’s office.
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Minnesota Crime Watch & Information publishes news, info and commentary about crime, public safety and livability issues in Minneapolis, the Twin Cities and Greater Minnesota.
Crime Watch MN
Minnesota Crime Watch & Information publishes news, info and commentary about crime, public safety and livability issues in Minneapolis, the Twin Cities and Greater Minnesota.
