Last week, the owner of a durable medical equipment (DME) supply company was sentenced to 6 ½ years in prison for her role in submitting more than $7 million in fraudulent claims to Medicare. Adeline Ekwebelem’s Los Angeles-based DME company, Adelco Medical Distributors, Inc., billed Medicare for medically unnecessary power wheelchairs “for beneficiaries often recruited off the street,” notes the government press release. Ekwebelem’s scheme, according to the prosecutors, implicated a “handful of complicit doctors,” who would write fraudulent prescriptions for wheelchairs in exchange for kickbacks.
One such doctor, Charles Okoye, last August pled guilty to conspiring with Ekwebelem to commit health care fraud. Between November 2008 and November 2011, Ekwebelem used “marketers” to recruit Medicare beneficiaries and then take them to see Dr. Okoye. According to the plea agreement, Okoye would issue DME prescriptions— primarily for power wheelchairs—“after giving the ‘patients’ a single, cursory examination.” Okoye’s referrals led Adelco to submit approximately $1.7 million in fraudulent claims to Medicare, and Medicare paid Adelco more than $820,000, the government notes.
Another doctor implicated in the DME scheme, Dr. Uche Chukwudi, fled a month before trial and remains a fugitive. Three of Adelco’s marketers – Romie Tucker, Cindy Santana and Maritza Hernandez – have also received sentences of up to two years in prison for their roles in the scheme.
Government’s Focus on Durable Medical Equipment
Earlier this year, the FBI announced a $5 million settlement with the former owner of a DME company called Quick Solutions Medical Supplies Inc. The owner admitted that from April 2010 through July 2013, he and his co-conspirators operated Quick Solutions for the purpose of billing the Medicare program for expensive durable medical equipment that was medically unnecessary and in many instances not actually provided to the Medicare beneficiaries. “Indeed, many of the beneficiaries who purportedly received the DME resided hundreds of miles away in Miami,” stated the government.
The government’s interest in DME fraud is not a new phenomenon, and extends back before the days of multi-million and sometimes billion dollar settlements based on False Claims Act liability. U.S. attorneys have shown continued interest in DME suppliers through the years. The Office of Inspector General recently noted: “Fraud schemes shift over time, but certain Medicare services have been consistent targets.” For example, OIG continues to “uncover fraud schemes and questionable billing patterns by durable medical equipment (DME) suppliers, home health agencies, community mental health centers, clinical laboratories, ambulance transportation suppliers, and outpatient therapy providers.”
OIG has released a number of fraud alerts concerning DME suppliers. In 2010, they sent out a notice specifically addressing DME suppliers’ marketing practices to Medicare beneficiaries. Specifically, the Special Fraud Alert brought attention to suppliers using independent marketing firms to make unsolicited phone calls to market DME to Medicare beneficiaries. OIG forbids such practices, unless the supplier meets a number of strict safe harbors intended to limit a cold-call approach. OIG warned DME suppliers and telemarketers that they may both be liable for engaging in prohibited marketing activities. OIG enforced this fraud alert in January of 2014 against a diabetes supply company.