Medical equipment fraud schemes worth watching

A federal jury in Los Angeles convicted a southern California man for his role in a $1.5 million durable medical equipment (DME)-related fraud scheme, the Department of Justice announced Monday. Vahe Tahmasian and a co-conspirator purchased an equipment company in the name of a straw owner.

Then they stole the personal identifying information of doctors and beneficiaries in the company's files and used it to submit Medicare claims for equipment neither ordered by a doctor nor provided to patients, according to the announcement. Tahmasian submitted $1,584,640 in reported charges and collected approximately $994,036.

Tahmasian's prosecution is one of a steady stream of cases moving through the justice system that underscore the need to make DME fraud and abuse a high enforcement priority.

Besides the frequent combination of medical identity theft and fraudulent billing, other DME-related schemes to watch for include billing for high-end products but delivering inferior ones, forging product prescriptions and paying kickbacks to professionals authorized to prescribe DME, according to a commentary by former U.S. Health and Human Services Inspector General Richard P. Kusserow.

Cases in point:  

A former hospital executive in Louisiana was convicted for accepting more than $1 million in kickbacks from a facility equipment vendor, as FierceHealthFinance reported.

In a bait-and-switch scheme, a California medical equipment supplier lured beneficiaries to medical clinics with the promise of a free reclining sofa; but people who came to the clinics instead received power wheelchairs they didn't need or want. This scheme resulted in more than $8.4 million in false billings, Kusserow noted.

And the owner of a Texas-based DME company purchased physician orders for equipment, paying at least five recruiters between $200 and $300 per bogus order obtained for wheelchairs and braces. He was sentenced to 81 months in federal prison and ordered to pay restitution of nearly $600,000.

Medicare auditors also are focusing on detecting medical equipment-related fraud and abuse. They now accept records from DME suppliers through Medicare's Electronic Submission of Medical Documentation system to streamline governmental anti-fraud reviews, as FierceHealthIT reported.

For more:
- here's the DOJ announcement
- read Kusserow's commentary

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