Psychiatrist Michael Applebaum sentenced to prison for Medicaid fraud, obstructing investigation

December 15, 2011

On November 21, 2011, Idaho psychiatrist Michael J. Applebaum was sentenced to two-to-five years in prison for Medicaid fraud and obstruction of an investigation. The jury found that Applebaum wrote patient progress notes and documented and billed for individual psychotherapy for a child who could not communicate.

Applebaum admitted to billing for an employee’s services as if it were his own, thereby generating a higher reimbursement rate (since he is an M.D. and the employee was presumably a counselor or other less credentialed practitioner).

The jury also found that Applebaum altered documents before giving them to investigators for the Idaho Attorney General’s Office and told investigators that certain records were out of the office for dictation. The Idaho State Board of Medicine revoked Applebaum’s license on May 12, 2011, citing Applebaum’s “exceedingly long history of alcohol and chemical abuse, addition and major depression…. His…repeated relapses…have caused serious difficulties in his life and have even resulted in felony convictions.”

The Board’s document states that Applebaum’s residency was interrupted for lengthy hospitalization from November 1, 1984 until September 30, 1985. In December 1986, he was admitted to another alcohol treatment program and was discharged with diagnoses of amphetamine dependence, narcotic abuse, history of hallucinogen and alcohol abuse and major depression. He was issued an Idaho medical license in 1989 upon execution of an indefinite Stipulation and Order which required him, among other things, to abstain from the use of all mind-altering drugs except those prescribed to him and to report any personal use of slips from total abstinence. In 1994, the Board terminated the Stipulation and Order on Applebaum’s request, “unaware of his false representations….”

In September 1994, he diverted controlled substances from his employer and was convicted of three felony charges of illegal possession of a controlled substance. He was shortly thereafter admitted to the facility Springbrook Northwest for evaluation and treatment. It was determined that he had reverted into polysubstance abuse, including mixing Demerol and Morphine with Ritalin and using it intravenously. His prognosis included severe relapse potential. In October 1995, he entered yet another rehab facility, Abbott Northwestern Hospital for assessment and recommendations regarding his possible return to practice. Abbott found him unable to return to practice for three to six months. Applebaum entered into a second Stipulation and Order with the Board in August 1996.

In February 1999, he relapsed and was admitted to yet another facility for evaluation and treatment. In June 2007, Applebaum submitted another request to the Board to have the second Stipulation and Order terminated, based on false statements that he was in full compliance. Unaware of his false statements, the Board terminated the Order.

The Board subsequently received information that Applebaum and a nurse practitioner in his office ordered significant quantities of controlled substances under his DEA registration and that there were over 1,000 pills unaccounted for (meaning they were either missing or diverted). It was found that he’d diverted Adderall, Vyvanse, Provigil and Ambien for his own use and Lyrica for his own children. The actions that formed the basis of the fraud charges that Applebaum was later convicted of are also noted in the Board’s Order. On June 6, 2011, the Board denied Applebaum’s petition to reconsider his license revocation.

Source: Final Order, in the Matter of Michael J. Applebaum, M.D., License No. M-5597, Case no. BOM-2009-6365, Idaho Board of Medicine.