Two owners of a nationwide telemedicine company admitted their roles in conspiracies to bribe doctors and to commit healthcare fraud. Stephen Luke, 54, of Phoenix, Arizona, and David Laughlin, 48, of Buckeye, Arizona, each pleaded guilty to informations charging them with one count of conspiracy to violate the federal Anti-Kickback statute and one count of conspiracy to commit healthcare fraud. Luke and Laughlin owned and operated RediDoc LLC, a purported telemedicine company based in Phoenix. From September 2017 through December 2019, Luke and Laughlin conspired together and with others to unlawfully enrich themselves by submitting and causing to be submitted false and fraudulent claims to federal healthcare benefit programs. They did so through a circular scheme of kickbacks and bribes paid to doctors and solicited from marketing companies, pharmacies, and providers of durable medical equipment (DME).
Pharmacies and DME providers agreed to pay bribes and kickbacks to marketing companies in exchange for drug prescriptions and doctor’s orders for DME. The marketing companies obtained the personal information of Medicare and TRICARE beneficiaries, which they sent to RediDoc, along with pre-filled prescriptions and DME orders. RediDoc then gave the beneficiary information and pre-marked prescriptions and DME orders to doctors to whom it paid bribes and kickbacks. The doctors often approved the prescriptions and DME orders without having had any contact with the beneficiary and without making a bona fide assessment that the medications or DME were medically necessary. Participants in the scheme selected particular drugs largely based on the reimbursement amounts that Medicare and TRICARE would pay, and not the medical needs of the beneficiaries.
Once RediDoc’s doctors had signed the prescriptions and orders regardless of medical necessity, RediDoc then transmitted them to pharmacies and DME providers around the country for fulfillment and billing. When the pharmacies filled the prescriptions and orders and were reimbursed by healthcare benefit programs, they sent a portion of the reimbursement amount to the marketing companies, who further shared those funds with Luke, Laughlin, and RediDoc to purchase additional prescriptions and DME orders. Through RediDoc, Luke and Laughlin received approximately $32 million from marketing companies. RediDoc paid several million dollars in kickbacks to doctors who were located in dozens of states around the country, including New Jersey. As part of their guilty pleas, Luke and Laughlin admitted that they and their conspirators caused the submission of false and fraudulent claims to healthcare benefit programs totaling more than $64 million. Those claims were ineligible for federal healthcare benefit program reimbursement, in part, because they were procured through the payment of kickbacks and bribes.
