Two Baton Rouge, La., residents have pleaded guilty for their role in a Medicare fraud scheme, which allegedly involved more than $21 million, announced the Department of Justice (DOJ), the Department of Health and Human Services (HHS), the FBI and the Louisiana State Attorney General’s Office.

Henry Jones, the owner of four medical equipment companies, pleaded guilty last Thursday before U.S. District Judge James J. Brady in the Middle District of Louisiana to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive healthcare kickbacks. Mary Bessie, one of Jones’ co-conspirators, pleaded guilty on January 11, 2012, before Judge Brady to one count of conspiracy to defraud the United States and to pay and receive healthcare kickbacks.

Jones admitted that between 2004 and 2009, he owned and operated four companies that were licensed to supply durable medical equipment (DME) to Medicare beneficiaries. Jones hired patient recruiters to obtain prescriptions for medical equipment that was medically unnecessary. The patient recruiters obtained beneficiary information and then asked the beneficiaries’ primary care physicians for prescriptions for orthotic equipment, power wheelchairs, wheelchair accessories and other medical equipment. When the beneficiaries’ physicians were unwilling to provide medically unnecessary prescriptions, the patient recruiters asked other physicians to write prescriptions based on cursory examinations of the patients. The recruiters then provided the prescriptions to Jones, who billed them to Medicare and paid the recruiters illegal kickbacks for each prescription obtained.

Bessie admitted that from 2004 to 2009, she and her co-conspirators solicited and received kickbacks from Jones in return for medically unnecessary prescriptions for Medicare beneficiaries. From 2004 to 2009, Bessie was paid kickbacks, and Bessie aided and abetted the payment of kickbacks in the form of checks totaling $82,230.

The DOJ press release alludes to the fact that others were involved in the alleged scheme to defraud, but there is no indication how many patient recruiters or physicians were involved. If the scheme involved $21 million dollars, surely others are being investigated. The physicians writing the prescriptions may not face conspiracy charges since it appears they had no knowledge of the scheme, but certainly the other patient recruiters involved will be sought after. Jones and Bessie are most likely supplying additional information to prosecutors as part of their plea agreement in order to get a lower sentence.

Sentencing dates have not yet been set. The maximum prison sentence for each count of conspiracy to commit health care fraud is 10 years. The maximum prison sentence for each count of conspiracy to defraud the United States and to pay and receive health care kickbacks is five years.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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