Medical Equipment Providers Charged in $13 Million Medicare Scam

The U.S. Attorney’s Office for the Eastern District of New York has indicted the owners of supposed durable medical equipment companies located in Brooklyn, N.Y., charging them with submitting more than $13 million in false claims to a managed care organization sponsored by the state’s government.

According to the indictment, between 2008 and 2013, the defendants created a string of fake DME companies and submitted the false claims, requesting reimbursement for DME that was purportedly provided to the organization’s members. Many of the members were elderly or disabled and had insurance through Medicare or Medicaid plans.

To create an illusion of legitimacy, the defendants opened bank accounts, obtained tax identification numbers from the IRS and used UPS Store locations and home addresses as business addresses. They also gave the bogus companies names similar to those the managed care organization already had approved to provide DME.

The alleged scheme also involved impersonating representatives of approved providers on the phone to obtain the care organizations’ preauthorization codes for claim submissions and referencing those codes in claims submissions, the New York field office said Tuesday.

Of the $13 million in false claims that were submitted, the government paid out $4 million.

The investigation was conducted by the FBI and HHS’ Office of the Inspector General as part of the Medicare Fraud Strike Force. Since 2007, the force has nabbed more than 1,900 defendants responsible for more than $6 billion in Medicare false claims.

If convicted, the defendants face a maximum sentence of 10 years. — Kellen Owings

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