What happens to licenses in Hertel & Brown case? State reviews likely

The consequences of a conviction in the Hertel & Brown fraud case include six years in federal prison for the two top defendants and the likelihood of probation for other defendants, based on the plea agreements for 18 of the 21 defendants who have avoided a trial by pleading guilty in federal court in Erie.

The guilty pleas and convictions also carry another consequence.

The defendants admitted to felonies, so their guilty pleas are all but certain to trigger professional licensure reviews to determine whether the defendants can continue to work as physical therapists or physical therapy assistants — the jobs they held at Hertel & Brown Physical & Aquatic Therapy.

Under Pennsylvania law, state licensing boards, such as the State Board of Physical Therapy, "may refuse to grant or renew, or may suspend or revoke any license ... where the applicant has been convicted of a felony."

The Pennsylvania Department of State, under which the licensing board operates, said in a statement that "a felony conviction does not necessarily lead to an automatic revocation."

The department said confidentiality rules prohibit it from commenting on whether any licensee is under investigation.

"Speaking generally," also according to the statement, "the Department reviews every potential license violation of which it becomes aware, whether that is through a complaint filed directly to the Department, a notification from local law enforcement or through media reports."

Federal court records show the Pennsylvania Department of State's Bureau of Enforcement and Investigation has been involved in the Hertel & Brown case, though state records show no disciplinary action has been taken to date.

Early in the Hertel & Brown case, two professional conduct investigators with the Bureau of Enforcement and Investigation "interviewed a number of licensees" as the investigators looked into "licensing issues," according to an evidentiary ruling U.S. District Judge Susan Paradise Baxter issued in January.

In the federal criminal probe, a total of 21 defendants were indicted in November 2021 on charges they conspired in a 14-year, $22 million overbilling scheme that defrauded Medicare, Medicaid and private insurers. The case is the largest-ever prosecution of white-collar crime in Erie.

State licensing boards usually wait to hear a case "until the criminal case is resolved," said longtime Erie lawyer Philip Friedman, who represents clients in matters of professional licensing. He is not involved in the Hertel & Brown case.

Friedman said a licensing board typically considers a number of factor in deciding whether a felony conviction should lead to discipline.

"Did it affect patients? What's the nature of the felony? Is it serious enough to warrant revocation?" Friedman said.

Reapplication for a license can occur in five years.

The Hertel & Brown criminal case is not yet resolved.

Though 18 of the 21 defendants have pleaded guilty — including Hertel & Brown as a corporation and owners Aaron W. Hertel and Michael R. Brown, both licensed physical therapists — three defendants are going to trial. Jury selection is scheduled to resume on March 17 to allow Baxter to address an emergency medical issue in her family.

The 18 defendants pleaded guilty to the felony of conspiracy to commit wire fraud and health care fraud. One of the defendants was the practice's longtime billing specialist. The other individual defendants worked as physical therapists or physical therapy assistants.

Hertel and Brown, the owners, face recommended prison terms of six years when Baxter sentences them in August, according to their plea deals. The billing specialist, Patricia S. Berchtold, faces three years of probation Many other defendants who pleaded guilty are also expected to be eligible for probation.

Of the 16 defendants who worked as physical therapists or physical therapy assistants, nine, including Hertel and Brown, have active licenses, according to state records. Six have expired licenses and one has an inactive license. Their guilty pleas could affect their attempts to renew or regain their licenses, based on state law.

The three defendants headed to trial are Julie A. Johnson,, a licensed physical therapist listed seventh in importance in the indictment; Abigayle J. Fachetti, a licensed physical therapy assistant listed 17th; and Marissa S. Hull, a licensed physical therapy assistant listed 19th. Hull's license is listed as expired in state records.

Professional standards as well as criminal law are at issue in the Hertel & Brown case.

Among the allegations to which the defendants admitted were that they billed as if licensed physical therapists and licensed physical therapy assistants provided services when unlicensed technicians really did the work. Such activity, according to the indictment, violated professional standards.

Pennsylvania law, as quoted in the indictment, states, "The physical therapist may not permit supportive personnel to provide physical therapy services."

Contact Ed Palattella at [email protected] or 814-870-1813. Follow him on X @ETNpalattella.