Kusserow’s Corner: DME Fraud Remains High Enforcement Priority

There is a steady stream of cases in the justice system to remind us that Durable Medical Equipment (DME) fraud remains high on enforcement agenda.  Just in the last couple months, we were reminded of this.  Common types of cases include:

  1. Submitting claims for products unneeded or never provided
  2. Billing for products and then providing inferior ones
  3. Forging or paying kickbacks for prescriptions for products
  4. Paying kickbacks to individuals authorized to write DME prescriptions
  5. Stealing beneficiaries’ identities to be used in submitting claims

The following are just a few examples.

  • July 17. Kim Ricks, owner of Kim’s Medical Supplies (“KMS”) in Los Angeles, pled guilty to conspiring to defraud Medicare and Medi-Cal of more than $650,000. She submitted fraudulent claims for power wheelchairs (PWCs) and other DME on behalf of people who did not have a legitimate medical need for the equipment, which was not delivered.  In some cases, billing and personal information of individuals was acquired and used, without their knowledge, to submit claims. Claims were also supported by fraudulent prescriptions forged by her co-conspirators. 
  • July 11. In the McAllen, Texas area, Marcello Herrera, the owner of now defunct RGV DME was ordered to prison for submitting fraudulent claims of approximately $11.1 million to Medicare and Medicaid.  Herrera and his co-defendants engaged in and directed a scheme to submit fraudulent claims for power wheelchairs, incontinent supplies, hospital beds, mattresses, and other DME supplies. They committed theft of the identities of beneficiaries and doctors.  Herrera received a sentence of 120 months for the conspiracy conviction in addition to a mandatory 24-month term for aggravated identity theft, which must be served consecutively to one another, resulting in a total 144 months in federal prison. He will also serve three years of supervision following his release, as well as pay restitution in the amount of $6,103,953.74.  As part of his guilty plea, he also agreed to a money judgment in the sum of $6,103,953.74, as well as forfeiting wheelchairs, scooters, and other DME items discovered in his leased storage facility.
  • July 1. Bolademi Adetola, the owner and operator of Latay Medical Services, a DME company based in Gardena, California was sentenced to serve five years in prison in connection with a health care fraud scheme and another three years of supervised release, as well as being ordered to pay $4,555,198 in restitution.  The conviction was for fraudulent billing in millions of dollars to Medicare for DME that was either never provided to beneficiaries or was not medically necessary.  In addition, cash kickbacks were paid for fraudulent prescriptions for DME, such as power wheelchairs and hospital beds. A co-conspirator physician was paid kickbacks for fraudulent prescriptions. Several Medicare beneficiaries testified that they were lured to medical clinics with the promise of a free recliner sofa, only to receive power wheelchairs that they did not need and did not want. This fraud scheme resulted in over $8.4 million in false and fraudulent claims to Medicare.
  • June 26. Philip Odoemena, former owner/operator of Kingsway Medical Systems, Inc., (Kingsway) of Desoto and Richardson, Texas, was sentenced to 35 months in federal prison and ordered to pay $483,995 in restitution. He submitted fraudulent claims falsely representing that legitimate and qualifying supplies, including wheelchairs and accessories, adult incontinence supplies and enteral nutrition supplies (tube feeding), were provided to Medicare beneficiaries and Medicaid clients. 
  • June 6. Abdul Waheed Alex Shittu, the owner of S & S Medical Supply Etc. in Stafford, Texas, was sentenced to 81 months in federal prison and ordered to pay $597,865.19 in restitution to Medicare and Medicaid. He fraudulently billed for DME supplies on physician orders paid by him, even though all the DME was not needed by or delivered to beneficiaries. He submitted approximately $1,154,025 in fraudulent claims to Medicare and Medicaid. He also purchased physician orders for DME, including wrist, back, foot, ankle, knee, elbow and shoulder braces, as well as wheelchairs.  He paid at least five recruiters $200 – $300 per order generated. The physicians, whose names were on the orders, had not seen or treated the patients.

These are only some recent examples.

Richard P. Kusserow served as DHHS Inspector General for 11 years.  He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters.  The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2013 Strategic Management Services, LLC.  Published with permission.