A federal jury convicted two men on February 7, 2023, for engaging in a scheme to defraud Medicare Advantage and Medicaid managed care plans of over $3.8 million. According to court documents and evidence presented at trial, Defendant 1, of North Bergen, New Jersey, owned a durable medical equipment supply company that was located in the Bronx, New York. Defendant 2, of Bridgeport, Connecticut, was his manager.
The defendants billed Medicare Advantage and Medicaid managed care plans for hundreds of expensive patient support systems that were never provided to patients or caregivers. These support systems included large devices that were designed to assist with lifting immobile patients and patients in nursing homes. In reality, the defendants provided patients with recliner chairs that had a seat lift feature. Between December 2010 and February 2014, the defendants fraudulently billed Medicare Advantage and Medicaid managed care plans more than $3.8 million and were paid approximately $2.4 million.
The defendants were both convicted of healthcare fraud. They are scheduled to be sentenced on Aug. 14 and Aug. 16, respectively, and each faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the US Sentencing Guidelines and other statutory factors. The FBI and HHS-OIG investigated the case.
Compliance Perspective
Issue
Fraud, waste, and abuse of federal or state resources is always illegal. Healthcare fraud harms the vulnerable in our communities, our healthcare system, and our basic expectation of competent, available care. It also contributes to rising healthcare costs. Those who engage in healthcare fraud are stealing from taxpayers while jeopardizing the health of Medicare and Medicaid beneficiaries. Curbing fraud is vital to conserving scarce healthcare resources and protecting beneficiaries.
Discussion Points
- Review the facility’s policies and procedures regarding fraud, waste, and abuse prevention and detection, and update policies as needed to incorporate information on how to respond to any fraudulent criminal activities staff may encounter.
- Train staff on fraud, waste, or abuse of federal and state resources. Ensure they understand that it is their responsibility to immediately report any suspicion or knowledge of fraudulent activity to their supervisor, the compliance officer, or via the Hotline.
- Periodically audit staff to ensure that they are aware of what could be perceived as fraud, waste, or abuse of federal or state resources and the steps that they should take to report suspected fraudulent activity. Periodically conduct auditing and monitoring of vendor transactions to ensure they are in agreement with compliance and ethics policies and government standards.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
