Paragon’s Fraud Roundup continues to highlight widespread health care fraud across the country—including the FBI nabbing one of its “Most Wanted Fraudsters”; a group allegedly forcing unnecessary respiratory tests on elderly patients; and multiple cases of billing for lab tests, medical devices, and services that patients did not need or receive. It’s always important to stress that these are stories that came to light between July 11 and July 24—just two weeks of fraud in America.
The complete stories can be found on the Health Care Fraud Dashboard.
National
A lab owner on the FBI’s “Most Wanted Fraudsters” list was arrested in connection with a $547 million Medicare fraud scheme that targeted elderly patients with unnecessary genetic tests. Khalid Satary, who owned and operated multiple labs throughout the U.S., allegedly conspired with patient recruiters, call centers, and telemedicine companies to deceive thousands of vulnerable Medicare beneficiaries into taking unnecessary, expensive genetic tests through deceptive marketing campaigns and illegal kickbacks and bribes. He was indicted in 2019 and released on the condition that he did not work in health care, but he allegedly kept billing Medicare, then failed to appear in court and fled the country. (July 21)
Oklahoma
An Oklahoma medical supply company owner was convicted of a $30 million scheme to defraud Medicare, TRICARE, and CHAMPVA through claims for unnecessary durable medical equipment. Mark Loftis paid more than $1 million to marketers who worked with call centers to extract private medical information from elderly and disabled patients and then used that information to obtain orders for orthotic braces and glucose monitors from telemedicine providers who never examined them. He kept the scheme going for years despite complaints that vulnerable patients suffering from dementia and Alzheimer’s disease were being targeted. (July 22)
Texas
A Dallas laboratory and its owners and investors agreed to pay $24 million to resolve allegations that the lab billed Medicare for unnecessary respiratory tests for seniors. Magnolia Diagnostics and its owners allegedly required senior living communities seeking COVID-19 tests to also receive expensive, medically unnecessary respiratory tests, using prepopulated forms and misusing provider signatures. One owner allegedly threatened to withhold COVID-19 testing from communities that opted out. (July 23)
New Mexico
A New Mexico driver for a non-emergency medical transportation (NEMT) company pleaded guilty to a scheme involving $4 million in fraudulent Medicaid claims. Dorothea Irving and the company, which was supposed to provide transportation for Medicaid beneficiaries who could not get to medical appointments, filed false trip records listing Irving and her children as the beneficiaries needing rides and submitted claims for trips that never occurred—often long-distance trips to purported Alcoholics Anonymous meetings. (July 20)
New York
A Brooklyn adult daycare owner was sentenced for a $3.2 million Medicaid fraud scheme. Eric Zhu owned Prime Life Adult Day Care, which paid Medicaid beneficiaries illegal kickbacks and bribes to enroll in the daycare center and then billed Medicaid millions for services never provided. He laundered the proceeds through multiple business entities to generate the cash used to pay the kickbacks and bribes. (July 20)
California
The CEO of a California home health agency was convicted in a scheme to submit fraudulent claims to Medicare, resulting in more than $3 million in payments. Simon Katz conspired with his wife, Veronica Katz—the former CEO of HealthNow Home Healthcare—and two former employees to defraud Medicare by having unqualified medical professionals provide care to patients, billing for services never provided, and submitting false documents to inspectors. (July 23)
New Jersey
A pharmacy owner and a technician were sentenced for a scheme involving fraudulent prescription drug claims submitted to health benefit programs. Kirtan S. Patel, who owned a Jersey City pharmacy, gave an insurer false documents claiming that providers had authorized prescriptions and customers had picked them up when neither claim was true, and caused more than $620,000 in losses to health insurance companies. Pharmacy technician Christopher Lugo, who billed his own insurer for a drug that was neither prescribed nor dispensed to him, caused more than $565,000 in losses. (July 14)
Massachusetts
A medical device company agreed to pay more than $550,000 to resolve allegations that it submitted false claims to Medicare for medically unnecessary devices. Sales personnel at Tactile Systems Technology allegedly falsified medical records to claim that patients required more expensive devices than they actually needed for their symptoms. (July 14)
Missouri
A home health care operator was sentenced for defrauding Missouri Medicaid through claims for services never provided. Camille S. Childress, owner of Inspiring Angels LLC, submitted fraudulent claims to Medicaid for services never provided, including when clients were in a hospital and could not possibly have been receiving care. To enroll her company in Medicaid, she submitted false documents claiming someone else owned the company to hide her ownership because a previous criminal conviction would have disqualified her from participating. (July 21)
As fraud cases continue to surface, track the latest on our Health Care Fraud Dashboard.
