Date Posted: Friday,
March 14, 2025
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Man Pleads Guilty in Connection With $17M Medicare Hospice Fraud and Home Healthcare Fraud Schemes
A California man pleaded guilty to healthcare fraud, aggravated identity theft, and money laundering in connection with a years-long scheme to defraud Medicare of more than $17 million through sham hospice companies and his home healthcare company. According to court documents, this man engaged in a scheme with others to operate a series of sham hospice companies. He, along with co-schemers, impersonated the identities of foreign nationals to use as the purported owners of the hospices—including using the identities to open bank accounts and sign property leases—and submitted false and fraudulent claims to Medicare for hospice services that were not medically necessary and not provided.
In submitting the false claims, he and his co-schemers also misappropriated the identifying information of doctors, claiming to Medicare that the doctors had determined hospice services were necessary, when in fact the purported recipients of these hospice services were not terminally ill and had never requested nor received care from the sham hospices. As a result of the scheme, Medicare paid the sham hospices nearly $16 million. The man personally received nearly $7 million of the proceeds from the fraud scheme, including more than $5.3 million in transfers to his personal and business bank accounts, which were laundered through a dozen shell and third-party bank accounts. He additionally admitted to wrongfully obtaining more than $1 million for his home healthcare agency through the fraudulent use of a doctor's name and identifying information in certifying Medicare beneficiaries for home healthcare, which he attempted to cover up by paying the doctor $11,000.
He pleaded guilty to healthcare fraud, aggravated identity theft, and money laundering. He is scheduled to be sentenced and faces a mandatory penalty of two years in prison on the aggravated identity theft charge, a maximum penalty of 10 years in prison on the healthcare fraud charge, and a maximum penalty of 20 years in prison on the money laundering charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Source: Man Pleads Guilty in Connection With $17M Medicare Hospice Fraud and Home Health Care Fraud Schemes (2025, February 3). www.justice.gov
Pharmacy LLC Agrees to Resolve False Claims Act Allegations of Billing for Drugs Not Dispensed
A New Jersey pharmacy has agreed to pay $350,000 to resolve allegations that it violated the False Claims Act by knowingly billing a federal healthcare program for certain medications that it never dispensed. According to the contentions of the United States in the settlement agreement: The United States alleged that, from January 1, 2015, through February 27, 2023, the pharmacy caused the submission of claims for reimbursement to the Medicare Part D Program for certain drugs that were never dispensed to beneficiaries. The government contends that inventory records showed that the pharmacy did not purchase enough of these medications from wholesalers to fill the prescriptions billed to the federal healthcare program.
The claims settled by the agreement are allegations only, and there has been no admission of liability.
Source: Pharmacy LLC Agrees to Resolve False Claims Act Allegations of Billing for Drugs Not Dispensed (2025, February 4). www.justice.gov
Louisiana Doctor Sentenced for Illegally Distributing Over 1.8M Doses of Opioids in $5.4M Healthcare Fraud Scheme
A Louisiana physician was sentenced yesterday to 87 months in prison for conspiring to illegally distribute over 1.8 million doses of Schedule II controlled substances, including oxycodone, hydrocodone, and morphine, and for defrauding healthcare benefit programs of more than $5.4 million.
According to court documents and evidence presented at trial, the physician owned and operated Medex Clinical Consultants (Medex). Medex was a medical clinic that accepted cash payments from individuals seeking prescriptions for Schedule II controlled substances. The physician routinely ignored signs that individuals frequenting Medex were drug-seeking or abusing the drugs prescribed. In 2015, the physician took a full-time job elsewhere, and although he was no longer physically present at the clinic, he pre-signed prescriptions, including for opioids and other controlled substances, to be distributed to individuals there whom he did not see or examine. In 2016, he hired another practitioner who, at his direction, also pre-signed prescriptions to be distributed to individuals in exchange for cash deposited into a Medex bank account. The evidence also demonstrated that the physician falsified patient records to cover up the scheme and to make it appear as though he was routinely examining the patients. With his knowledge, these individuals filled their prescriptions using their insurance benefits, thereby causing healthcare benefit programs, including Medicare, Medicaid, and Blue Cross Blue Shield of Louisiana, to be fraudulently billed for controlled substances that were prescribed without an appropriate patient examination or determination of medical necessity.
On July 22, 2024, the physician was convicted by a jury in the Eastern District of Louisiana of one count of conspiracy to unlawfully distribute and dispense controlled substances, four counts of unlawfully distributing and dispensing controlled substances, one count of maintaining a drug-involved premises, and one count of conspiracy to commit healthcare fraud.
Source: Louisiana Doctor Sentenced for Illegally Distributing Over 1.8M Doses of Opioids in $5.4M Health Care Fraud Scheme (2025, February 6). www.justice.gov
Four Pharmacists Sentenced for Roles in $13M Medicare, Medicaid, and Private Insurer Fraud Conspiracy
Four pharmacy owners have been sentenced for their roles in a conspiracy to commit healthcare fraud and wire fraud. One was sentenced to 10 years in prison; the second to seven years in prison; the third to two years in prison; and the fourth pharmacist was sentenced to five years and five months in prison.
According to court documents and evidence presented at trial, they billed Medicare, Medicaid, and Blue Cross Blue Shield of Michigan for prescription medications that they did not dispense at five pharmacies they owned and operated in Michigan and Ohio. The defendants collectively caused over $13 million of loss to Medicare, Medicaid, and Blue Cross Blue Shield of Michigan.
On September 5, 2024, a federal jury convicted all four of conspiracy to commit healthcare fraud and wire fraud.
Source: Four Pharmacists Sentenced for Roles in $13M Medicare, Medicaid, and Private Insurer Fraud Conspiracy (2025, February 6). www.justice.gov
Doctor Convicted of $24M Medicare Fraud Scheme
A New York doctor was found guilty by a federal jury for causing the submission of over $24 million in fraudulent claims to Medicare for medically unnecessary laboratory tests and orthotic braces. According to court documents and evidence presented at trial, the physician received tens of thousands of dollars in illegal cash kickbacks and bribes in exchange for ordering laboratory tests, including expensive cancer genetic tests, that were billed to Medicare by two related laboratories located in New York.
As part of the scheme, he authorized hundreds of cancer genetic tests for Medicare beneficiaries who attended COVID-19 testing events at assisted living facilities, adult day care centers, and a retirement community in 2020. The physician was not treating any of the patients who attended the testing events and, in many cases, did not speak to or examine the patients prior to ordering cancer genetic tests and other laboratory tests for them. He also billed Medicare for lengthy office visits that he never provided to these patients. Several Medicare patients for whom he ordered cancer genetic tests and billed for office visits testified at trial that they did not know who he was and had never met or spoken to him. The physician did not contact the patients after the testing events to review the results of the cancer genetic tests, and, in some cases, the patients never received the test results.
In addition to the laboratory testing scheme, he also received illegal cash kickbacks and bribes from the owner of a durable medical equipment supply company in exchange for ordering medically unnecessary orthotic braces for Medicare and Medicaid beneficiaries. The evidence presented at trial showed him on an undercover video receiving a large sum of cash in exchange for signed prescriptions for orthotic braces.
The medically unnecessary laboratory tests and orthotic braces that he ordered in exchange for illegal kickbacks and bribes caused Medicare to be billed more than $24 million. Medicare paid more than $2.1 million to the laboratories and the durable medical equipment supply company involved in the schemes.
Following his conviction on the 10 counts, he was remanded to the custody of the U.S. Marshals Service. He is scheduled to be sentenced on June 26 and faces a maximum penalty of 10 years in prison on each count of conspiracy to commit healthcare fraud, healthcare fraud, and solicitation of healthcare kickbacks, and five years in prison on each count of conspiracy to defraud the United States and to pay, offer, receive, and solicit healthcare kickbacks and conspiracy to defraud the United States and to receive and solicit healthcare kickbacks. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Source: Doctor Convicted of $24M Medicare Fraud Scheme (2025, February 11). www.justice.gov
Vice President of Healthcare Software and Services Company Pleads Guilty to $1B Healthcare Fraud Conspiracy
A Kansas man pleaded guilty to operating an internet-based platform that generated false doctors' orders to defraud Medicare and other federal healthcare benefit programs of more than $1 billion.
According to court documents, the man admitted that he and his co-conspirators targeted hundreds of thousands of Medicare beneficiaries to provide their personally identifiable information and agree to accept medically unnecessary orthotic braces, pain creams, and other items through misleading mailers, television advertisements, and calls from offshore call centers. He and his co-conspirators owned, controlled, and operated DMERx, an internet-based platform that generated false and fraudulent doctors' orders for orthotic braces, pain creams, and other items for these beneficiaries. As the vice president of the company that operated DMERx, he admitted that he offered to connect pharmacies, durable medical equipment (DME) suppliers, and marketers with telemedicine companies that would accept illegal kickbacks and bribes in exchange for signed doctors' orders that were transmitted using the DMERx platform. He and his co-conspirators received payments for coordinating these illegal kickback transactions and referring the completed doctors' orders to the DME suppliers, pharmacies, and telemarketers that paid for them. The fraudulent doctors' orders generated by DMERx falsely represented that a doctor had examined and treated the Medicare beneficiaries when, in reality, purported telemedicine companies paid doctors to sign the orders without regard to medical necessity and based only on a brief telephone call with the beneficiary, or sometimes no interaction with the beneficiary at all. The DME suppliers and pharmacies that paid illegal kickbacks in exchange for these doctors' orders generated through DMERx billed Medicare and other insurers more than $1 billion. Medicare and the insurers paid more than $360 million based on these false and fraudulent claims.
He pleaded guilty to conspiracy to commit healthcare fraud and faces a maximum penalty of 10 years in prison. A sentencing hearing will be scheduled at a later date. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Source: Vice President of Health Care Software and Services Company Pleads Guilty to $1B Health Care Fraud Conspiracy (2025, February 20). www.justice.gov
Ohio Doctor Agrees to Pay $600,000 to Settle False Claims Act Allegations
An Ohio physician has agreed to pay the United States $600,000, plus contingent payments, to resolve False Claims Act allegations that he submitted fraudulent Medicare claims related to electro-acupuncture devices. This man is a doctor licensed in Ohio who provided electrical nerve pulse stimulation services to patients in facilities across the state. From 2016 until 2018, he allegedly improperly billed Medicare for the application of percutaneous electrical nerve pulse stimulation devices (the “P-Stim Device”) in an office setting. The P-Stim Device is a device for treatment of chronic pain that, per the manufacturer's instructions, is affixed behind a patient's ear using an adhesive. Needles are inserted into the patient's ear and affixed using another adhesive. Once activated, the device then provides intermittent stimulation by electrical pulses. It is a single-use, battery-powered device designed to be worn for several days until its battery runs out, at which time the device is thrown away.
The procedures allegedly did not involve any surgery, anesthesia, or take place in an operating room (or even at a facility with such capabilities) but were billed to Medicare as surgically implanted neurostimulators, contrary to repeated guidance from the Centers for Medicare & Medicaid Services.
Source: Ohio Doctor Agrees to Pay $600,000 to Settle False Claims Act Allegations (2025, February 21) www.michigan.gov
Source: Sonal Patel, BA, CPMA, CPC, CMC, ICDCM
Sonal Patel is CEO and Principal Strategist at SP Collaborative and has over 13 years of experience understanding the art of business medicine. She is a nationally recognized thought-leader, speaker, author, creator, and consultant. As the CEO and Principal Strategist of SP Collaborative, LLC, she serves as a partner to healthcare organizations, medical practices, physicians, healthcare providers, vendors, consultants, medical coders, auditors, and compliance professionals in working together to elevate coding compliance education for the business of medicine.
www.spcollaborative.net
