Articles Posted in Durable Medical Equipment Fraud

telemed-300x167Having recently written here about “target letters,” I thought it would be helpful to discuss what happens in a fairly garden variety Medicare prosecution.  A few weeks back, a Florida man who the owner of a durable medical equipment company was charged in federal court in Savannah, Georgia, for his involvement in a Medicare kickback and telemedicine conspiracy.

Patrick Wolfe of Belleair Beach, FL, was accused in an information (a charging document that substitutes for a grand jury indictment) of conspiring to pay kickbacks for “leads,” which as it turns out were not actually “leads” at all.  The so-called “leads” were signed orders from nurse practitioners and doctors, which were then submitted to Medicare Part B and Medicare Part C for payment through Wolfe’s DME Georgia based company, Wilmington Island Medical Inc.  Reading the information lays out how the scheme operated.

Apparently, the feds have been on to Wolfe for a while.  In fact, Wolfe is the 25th defendant who has been charged in a far reaching telemedicine conspiracy arising out of “Operation Brace Yourself” and “Operation Double Helix” as part of the largest Medicare fraud ever prosecuted in the Southern District of Georgia.  As is so often the case, I would say that other defendants looking to cut a deal with prosecutors in hopes of lessening their sentence by way of earning a §5k1.1 motion for downward departure or a Rule 35 motion reduction of sentence probably fingered Wolfe as someone who was paying kickbacks for bogus leads.

Photobucket MIAMI, FLORIDA (AUGUST 22, 2011) – Elizabet Lombera, 39, of Miami Lakes became the tenth person arrested in a large-scale scheme to defraud the Medicare system of more than $27 million.
Lombera controlled five durable medical equipment companies in Miami, but to conceal her involvement, she and fellow conspirators put nominee presidents in place. The companies: Mercy Medical Supply, Inc., JHH Group, Inc., La Numero 1 Farmacia Discount Corp., Yani’s Pharmacy, Inc., and El Perimetro Farmacia Discount Corp, submitted fraudulent for more than $27 million and received $12,438,952 as reimbursement. Allegations levied against Lombera state she used the proceeds for personal gain, which included taking a trip to Japan.

Photobucket LOUISVILLE, KENTUCKY (AUGUST 15, 2011) – Although their durable medical equipment company was based in Florida, Yunior Lopez, 34, of Miami, Florida and Arturo Esquivel, 39, of Hialeah, Florida, had a 13-count indictment leveled against them regarding their false billings to Medicare on behalf of Kentucky patients.

The defendants allegedly used two Kentucky doctors’ names when submitting the false claims to Medicare for products never provided to the patients. Investigators found the defendants’ two businesses, Universal of Work Services and Steel Quality Medical had none of the supplies they were claiming to have provided to patients.

If convicted, the defendants face a maximum sentence of 35 years imprisonment. Arraignment for both defendants is scheduled for August 23, 2011 before the U.S. Magistrate Judge in Louisville, Kentucky.

Photobucket WASHINGTON (AUGUST 12, 2011) – The Office of the Inspector General of the Department of Health and Human Services says more than 60 percent of all power wheelchairs, which are usually covered 100 percent by Medicare or private insurance, are not necessary for patients. The high cost of these chairs make them an attractive sales product for slick salesmen eager to make a buck.
Past investigations show that Medicare has paid close to four times the average $1,048 cost, making Medicare responsible for more than $4,000 for each chair. In many cases, the chairs won’t work in the patient’s home because doorways are too narrow or there is simply not enough room in the house to maneuver the chair. In Marvin Rosen’s Coral Springs home it’s become something he sits in occasionally to watch television because the chair isn’t supposed to be used outside, and his home is too small to use it inside. The company who provided him with the chair failed to measure his home, which is a requirement before a patient can receive one.

Photobucket NASHVILLE, TENNESSEE – Renal Care Group and Fresenius thought they were done with the long-running whistle-blower case when the judge handed down a ruling stating Fresenius, who owns Renal Care, owed the government restitution in the amount of $19.3 million. But then a few more facts came to light. U.S. District Court Judge William J. Haynes Jr. reevaluated his previous ruling and handed down a new one…. to the tune of $86.2 million.

Before Fresenius bought Renal Care, a dialysis treatment center, Renal Care submitted fraudulent claims to Medicare for a higher tier of reimbursements than it was allowed. From 1999 to 2005, Renal Care filed claims for at-home equipment at the higher level while operating dialysis centers, but that reimbursement level is not available to companies who do both.

After Fresenius bought Renal Care and was later sued, Fresenius asserted that Medicare knew of the dialysis company’s structure and still paid claims. Jane Kramer, Fresenius spokesperson stated that Fresenius had received word from the Department of Health and Human Services that the billing practices used by Renal Care were in accordance with Medicare’s rules.

Photobucket HOUSTON, TX – Taking advantage of a tragic situation, a Houston federal jury returned a verdict finding a patient recruiter guilty of health care fraud. Marion Beverly Metoyer was convicted of one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiring to receive illegal kickbacks for referring Medicare beneficiaries and two counts of receiving illegal kickbacks for those referrals.

According to the Indictment, Helen Etinfoh owned and operated Luant & Odera, Inc., a supplier of durable medical equipment, doing business as Tonni Medical Equipment & Supplies. Metoyer recruited patients for Luant and received kickbacks when she provided the company with Medicare beneficiaries who could be billed for services rendered.

Etinfoh, along with other co-conspirators, falsely billed Medicare for wheelchairs, wheelchair accessories and power scooters. Based on Metoyer’s and other’s representations to the company, Luant falsely billed Medicare using a special code designating that the power wheelchairs were replacements for wheelchairs lost during the 2008 hurricanes that Houston suffered.

PhotobucketWASHINGTON, D.C. – Two related sleep medicine and durable health equipment companies have agreed to repay the United States $650,000 in false claims made to Medicare. The companies, Areté Sleep Therapy LLC and Areté Holdings LLC, with facilities in Arizona and Texas, billed the claims as part of sleep diagnostic studies performed by technicians who did not hold the proper licensure or certification according to Medicare policies. The amount to be reimbursed also includes claims made for provision of durable medical equipment as a result of those tests.

In January 2011, Areté filed for Chapter 11 in the U.S. Bankruptcy Court and agreed to pay the False Claims Act settlement from monies received following the sale of its assets. The allegations came as a result of a whistleblower lawsuit, and as a result, the person reporting the fraud will receive a portion of monies repaid, which in this case total $107,250.

Federal Healthcare Fraud Strike Force teams are currently operating in 9 locations: Miami, Los Angeles, Houston, Detroit, Brooklyn, Tampa, Baton Rouge, Dallas and Chicago.

PhotobucketMIAMI, FL – The Departments of Justice and Health and Human Services announced that Obel Martinez and Damaris Gil, a married couple, entered into plea agreements and admitted to committing health care fraud. According to the factual proffer filed in court at the the of the guilty plea, Martinez and Gil agreed that it was their scheme to bilk Medicare of $1,089,234 in fraudulent claims. The defendants owned and operated a durable medical equipment company, OM Best Help Corp., which provided equipment as well as prescription drugs to Medicare beneficiaries.

The defendants also used Medicare provider numbers of licensed medical doctors without prior authorization and represented to Medicare that the doctors had written prescriptions for the durable medical equipment, when in fact, they did not. The pair also never provided the equipment to the Medicare beneficiaries after filing the false claims.

Sentencing is scheduled for August 23, 2011, and each defendant could receive up to a maximum of 10 years in prison.

handcuffs-and-calculator-on-headlines-about-white-collar-crime.jpgAn investigation coordinated by the U.S. Department of Justice Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Miami has resulted in the arrest of Emilio Felipe Lopez, 47, and Orlando Hernandez Estevez, 25, both of Miami-Dade County. The arrests by federal agents stem from two separate indictments charging Estevez and Lopez with health care fraud, in violation of Title 18, United States Code, Section 1347.

According to the indictment, Emilio Felipe Lopez was the president of Charlie RX, Inc., a DME business operating in Hialeah, Florida. The indictment alleges that Charlie RX submitted $689,853 in false claims to Medicare for, among other items – are you ready for this one – male vacuum erection systems for female patients! The company received $370,838 from in Medicare based upon its false billings.

According to a separate indictment returned in March 2010, Orlando Hernandez Estevez was the president of Happy Trips of Miami, Corp., another DME business operating in Hialeah, Florida. The indictment alleges that Happy Trips submitted $1,188,956 in false claims to Medicare for inhalation drugs. The company received $364,120 from Medicare based upon the false billings.

courtroom.jpgHOUSTON – Whether it is known as “courtroom rent” or by some other name, the dangers of going to trial as opposed to pleading guilty requires a careful consideration of the case, the facts, the sentencing guidelines and the judge.
Two Texas DME owners learned the very hard way yesterday at their sentencing following a trial. Rhonda Fleming was sentenced to 30 years in prison for her role in a DME scheme, she was the alleged owner of three DME companies and a billing company that submitted the claims, totaling $36 million. Her trial co-defendants, a co-owner of one DME and a “runner” (someone who supplied patient information for the others in the scheme) were sentenced to 11 years 3 months and seven and a half years in prison. Their co-defendants, who plead guilty before trial and testified at trial received 12 months, 60 months and 70 months in prison.
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