Maximum sentence for head of Houston Medicare fraud scheme

Medicare losses of nearly $7 million were acknowledged by two individuals involved in a scheme to defraud the program. They were sentenced to federal prison and ordered to pay restitution, according to the Department of Justice (DOJ). The scheme involved “so-called diagnostic testing labs” in the Houston area which paid Medicaid beneficiaries for use of their Medicare numbers to fraudulently bill Medicare.

A man from California formed 11 diagnostic testing clinics in the Houston area that were used to fraudulently bill Medicare for services and tests that were either not performed or not medically necessary. Co-conspirators were instructed to order ultrasounds, allergy tests, and pulmonary function tests for every beneficiary and to include poor circulation, shortness of breath, heart problems, and allergies on their charts. The other sentenced individual, a woman from Houston, acted as a marketer at seven of the clinics to recruit and pay the Medicare beneficiaries. Marketers were paid $80 to $100 cash, with part of the amount going to the beneficiary and the rest being kept by the marketer. When the first clinic was put under pre-payment review and payments slowed down, the owner recruited others to open new clinics and new bank accounts in their names.

The owner was sentenced to the statutory maximum of 10 years. The marketer was sentenced to 37 months in prison. Two other co-conspirators previously pleaded guilty and are awaiting sentencing.