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.

DME company owner convicted on 18 counts, receives 80-month sentence

The owner of a medical equipment supply company faces 80 months—just under seven years—in prison and was ordered to pay restitution of about $2 million after directing a fraud scheme. The New Orleans-based company, called Psalms 23 DME LLC (Psalms), used patient recruiters to get the names and billing information of local Medicare beneficiaries, and then fraudulently billed Medicare for durable medical equipment (DME) for these patients.

Scheme

The government’s evidence at the trial showed that Psalms billed for equipment from power wheelchairs to back braces, mostly for beneficiaries that did not need, want, or even receive the equipment. Most of the $3.3 million in claims billed were fraudulent, and the company received $2 million in payment on these claims.

The owner was convicted of 18 counts of fraud, conspiracy, and other charges following a five-day trial.