Medicare is the largest healthcare program in the United States with more than 65 million people receiving Medicare benefits. Unfortunately, it has long been a program that has been exploited by scammers with the Centers for Medicare & Medicaid Services estimating at between 3% and 10% of Medicare payments are fraudulent, accounting for as much as $100 billion in annual fraudulent payments.
Medicare is a tempting target for criminals due to the huge volume of claims it processes and its business model of “pay first-audit later” where claims are required by law to be processed and paid generally within 30 days.
Common Medicare fraud involves billing for services never provided, billing for medically unnecessary medical equipment or tests, kickbacks, telemedicine abuse and identity theft.
Recently, Brett Blackman, the CEO of HealthSplash, a healthcare company that operated an online platform used in medical billing and telemedicine, was convicted of filing fraudulent claims of more than a billion dollars of which Medicare paid $450 million. While most instances of Medicare fraud as described above are done by individual doctors and criminals on a smaller scale, HealthSplash operated its crimes on an unprecedented large scale. According to Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division, “The defendant orchestrated a massive telemarketing scheme that used foreign call centers and spam mailers to target our country’s senior citizens and defraud government health care benefit programs.”
The key element of the fraud was a system called DMERx (Power Mobility Doctor Rx) which when operated properly would connect doctors, patients and suppliers of medical equipment and facilitate prescriptions and billing for medical equipment. During the trial testimony showed that the DMERx platform generated immense numbers of legitimate appearing medical orders that doctors would sign off on electronically, leaving the false impression that doctors had examined patients when they had not.
According to U.S. Attorney Jason A. Reding Quinones, “The defendant built and operated a platform that generated false doctor’s orders used foreign call centers to target seniors, and helped push medically unnecessary equipment through Medicare and other federal health care programs. Seniors were exploited. Taxpayers were robbed. Programs meant to care for the elderly, veterans, service members, and families were treated like a cash register.”
At trial it was shown that Blackman and his co-conspirators used foreign call centers to target hundreds of thousands of legitimate Medicare beneficiaries and then convince them to accept medically unnecessary orthotic braces and other medical equipment. To further the scam, HealthSplash arranged for telemedicine doctors to sign off on bogus prescriptions for these items so that Medicare could be billed for them. They also connected pharmacies, medical equipment suppliers and marketers with telemedicine companies that would accept kickbacks and bribes in exchange for signed doctors’ orders created through the DMERx platform all the while Blackman and his co-conspirators took a cut of the profits in return for their referrals.
Doctors who had little or no interaction with the patients were enlisted and were paid kickbacks to sign the phony prescriptions. Some of the prescriptions falsely claimed patient examinations for tests that never occurred.
During the trial an undercover Justice Department agent testified that he had posed as a Medicare beneficiary and was contacted by a foreign call center that pressured him to agree to multiple braces through a doctor who signed off on the equipment through the DMERx platform. The doctor signed off on the order for the equipment without ever even speaking with the undercover agent “patient” even though the order required tests that could only be performed in person.
The jury found Blackman guilty of a number of felonies including conspiracy to commit health care fraud, wire fraud, conspiracy to pay and receive illegal kickbacks and conspiracy to defraud the United States.
Gary Cox a co-conspirator had earlier been convicted of similar crimes and sentenced to 15 years in prison. Blackman is awaiting sentencing on August 26th and is facing as much as thirty years in prison.
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