DME (DURABLE MEDICAL EQUIPMENT) PROSECUTIONS
The federal government is increasingly targeting physicians for participating in the fraudulent prescription of Durable Medical Equipment. A trusted locum may contact a physician tenens company and offer a part-time position reviewing medical records online. For young MDs, the work is easy, fits their schedule, and seems natural as they are from a computer generation. The results can be devastating.
A recent spate of prosecutions and arrests has spread across the United States. Many physicians, especially young physicians seeking to supplement their income, have been or will be arrested. Here is some history preceding the Blackman, Schreck, and Cox arrests.
Prosecution for DME Fraud
In December of 2022, the owner of a Durable Medical Equipment Company was arrested as part of an (alleged) $ 17 Million Kickback Conspiracy. The person arrested (Alexandra Stchastlivtseva) owned several durable medical equipment (DME) companies. The government claims that Stchastlivtseva paid kickbacks and bribes to several telemedicine and marketing companies.
How DME Frauds Work: A Detailed Look
Durable Medical Equipment (DME) fraud schemes are complex and exploitative, often targeting vulnerable populations like the elderly. Here’s a detailed breakdown of how these frauds typically operate:
1. Profit Motive and Recruitment
DME suppliers aim to make a profit by hiring marketing entities to contact Locum Tenens companies. These companies then hire doctors to write prescriptions. The involvement of Locum Tenens companies and telemedicine services lends an air of legitimacy to these otherwise dubious operations.
2. Creation and Distribution of Patient Charts
Patient charts are created and sent to doctors for a quick review. These charts almost always justify a prescription, and sometimes the same file is sent to multiple doctors. This process is streamlined to ensure that prescriptions are written quickly and without thorough examination.
3. Exploitation of Vulnerable Populations
Marketing companies often obtain patient information by giving seminars at senior centers and other venues where they can manipulate and exploit potential patients. In exchange for a free meal and some entertainment, seniors provide their name, date of birth, and Medicare number. This information is then used to create a patient file, which is electronically sent to the doctor.
4. Case Study: Stchastlivtseva
In the Stchastlivtseva case, Medicare paid more than $17.3 million. Part of this money was reinvested in the scheme, leading to charges of money laundering against Stchastlivtseva and others. The potential criminal sentence for such offenses can exceed 20 years in prison.
5. Impact on the Elderly
Elderly individuals may notice strange devices and equipment listed on their Medicare Summary Notice (MSN) or Explanation of Benefits (EOB). Sometimes, equipment they never ordered shows up at their front door. The marketing entities behind these schemes are often untouchable, as they operate fly-by-night and are frequently based overseas.
6. Legal Consequences
While the marketing entities are hard to prosecute, the equipment suppliers and the doctors who write the prescriptions are often arrested. These individuals face severe legal consequences, including potential charges of fraud and money laundering.
Expert Defense for Doctors
Medical doctors often find themselves as victims in telemedicine fraud cases. The companies that hire them through legitimate locum tenens agencies quickly disappear when law enforcement gets involved, leaving the physicians vulnerable and at risk of arrest.
Our team of physician lawyers is certified by the State Bar of California Board of Legal Specialization as criminal defense specialists in telemedicine fraud cases. This certification is awarded based on a rigorous set of requirements and testing.
For expert defense, call Daniel Horowitz at 925-283-1863.