An owner of a Texas durable medical equipment (DME) company was sentenced to 49 months in federal prison to be followed by a year of supervised release for his role in a medical equipment fraud scheme, according to a July 31, 2023, press release from the Texas Office of the Attorney General (OAG). In addition, the owner was ordered to pay $5,114,016.19 in restitution to government healthcare programs. A jury convicted the owner of conspiracy to defraud the United States and to pay and receive healthcare kickbacks, as well as seven counts of payment and receipt of kickbacks.
The owner obtained patients by offering and paying kickbacks to marketers as well as disguising illegal payments as marketing services and outsourced business services. He then submitted false claims to both Medicaid and Medicare for orthopedic equipment that was never provided, not medically necessary, and not authorized by a physician.
The investigation was conducted by the Texas Medicaid Fraud Control Unit (MFCU) in partnership with the Federal Bureau of Investigation (FBI), and the US Department of Health and Human Services’ Office of Inspector General (HHS OIG).
According to the press release, the OAG’s MFCU is dedicated to ensuring that those who exploit our healthcare system for personal gain are brought to justice by aggressively pursuing those who engage in healthcare fraud, working to safeguard taxpayer funds, and defending the integrity of vital healthcare programs. In the last fiscal year alone, the MFCU recovered more than $236 million in settlements and judgments for Texas taxpayers. In Texas, Medicaid costs taxpayers over $40 billion per year. Federal and industry authorities estimate that fraud comprises up to 10 percent of the costs of the Medicaid program, making Medicaid fraud a $4 billion problem in Texas.
Compliance Perspective
Issue
Under federal and state Anti-kickback Statutes, you may not knowingly and willfully offer, pay, solicit, or receive anything of value to induce or reward for referrals of federal or state healthcare program business. In some industries, it is acceptable to reward those who refer business to you. In healthcare however, it is a crime. The prohibition against kickbacks applies to those who pay for referrals and to those who receive them. Kickbacks can take various forms, such as bribes or rebates. They can be given in cash or in kind. Failure to promptly report a kickback can result in lawsuits, fines, and other sanctions.
Discussion Points
- Review policies and procedures for preventing and reporting an anti-kickback violation. Update your policies and procedures as needed.
- Train all staff on federal and state anti-kickback statutes and what can be considered a kickback. Include information on how to report concerns and suspected violations, and make sure staff know that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect an illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
