Durable Medical Equipment Fraud (“DME Fraud”) is a highly active area of Federal criminal prosecution.
Last year, the FBI and the US Department of Health and Human Services Office of the Inspector General broke up and prosecuted a DME Fraud scheme alleged to have caused more than $1 billion in Medicare losses.
What is Durable Medical Equipment Fraud? Under what statutes is it prosecuted? What are the defenses to this Federal charge?
DME Fraud Defined
Durable Medical Equipment Fraud is a form of Medicare or Medicaid healthcare fraud.
The practice involves the prescription and ordering of medically unnecessary back braces, shoulder braces, wrist and knee braces, and other DME, and then billing Medicare for the products.
It is a form of healthcare fraud that is prosecutable under a variety of Federal statutes.
The Durable Medical Equipment Fraud charges that have been filed by Federal prosecutors have swept up the operators of call centers and telemedicine companies, referring and prescribing physicians and medical professionals, and the owners of durable medical equipment manufacturing companies.
DME Fraud is a complex scheme with many moving parts—and multiple active parties.
Which Statutes Are Used to Prosecute Durable Medical Equipment Fraud?
Depending upon which party is accused of Durable Medical Equipment Fraud, the charges will vary.
The list below reflects statutes that have been relied upon in charging documents filed by Federal prosecutors. In at least one case, the defendant was charged under all of these statutes.
- 18 USC § 2
This brief statute is used to charge accomplices to Federal crimes as aiders and abettors. It allows one who has assisted in the commission of a crime to be charged as an accomplice.
This is true even if the defendant was unaware of the criminal assistance provided.
- 42 USC § 1320a-7(b)(1) and (2)
Known as “The Anti-Kickback Statute,” this lengthier statute criminalizes the making of false statements or representations in any application for a benefit or payment under a Federal health care program.
It also criminalizes knowingly and willfully soliciting or receiving any kickback, bribe, or rebate in cash or “in kind” for referring individuals for services or the furnishing of items reimbursable under a Federal health care program.
Those convicted under this statute are subject to fines of up to $100,000 and imprisonment for up to 10 years.
- 18 USC § 371
This statute criminalizes conspiracies to commit other offenses, or to defraud the United States.
A conviction under this statute carries a penalty of a fine or five years in prison—or both. However, if the underlying offense is a misdemeanor only, the punishment for the conspiracy to commit that offense will not exceed that of the underlying misdemeanor.
- 18 USC § 1347
18 USC § 1347 is the health care fraud statute.
It states that anyone knowingly and willfully executing or attempting to execute a scheme to defraud any health care benefit program may be imprisoned for 10 years and fined.
If the result of the violation is serious bodily injury or death, this penalty can be increased to a 20-year or life prison sentence, as well as a fine.
- 18 USC § 1349
Likewise, a conspiracy to commit healthcare fraud can be prosecuted with the same penalties under this statute.
- 18 USC § 287
A knowingly false or fictitious claim presented to any department of the United States government is punishable with a fine a 5-year prison sentence under this statute.
- 18 USC § 1341
This statute is used to prosecute frauds and swindles utilizing the US Postal Service in the execution of the fraudulent activity.
This crime carries a potential prison sentence of 20 years, as well as a fine.
- 18 USC § 1343
Durable Medical Equipment Fraud can also be prosecuted as wire fraud if telecommunications are utilized in the furtherance of the fraudulent activity.
Wire fraud likewise carries a potential prison sentence of 20 years, as well as a fine.
Examples of DME Prosecutions
In the Middle District of Florida, the U.S. Attorney charged the owner of two telemedicine companies under The Anti-Kickback Statute for allegedly soliciting and providing kickbacks and bribes for the referral of durable medical equipment orders.
The Government is seeking not only criminal punishment of the defendant but also the forfeiture of multiple real properties allegedly purchased with the fruits of the activity under 11 USC § 987(a)(7), the criminal forfeiture statute.
In the Eastern District of Pennsylvania, a physician was charged with allegedly conspiring with two telemedicine companies for the submission of false claims to the Medicare program. The false claim alleged here was the physician’s certification to Medicare that he would comply with the program’s rules and regulations and would refrain from violating the Anti-Kickback Statute.
In the Northern District of Texas, the owners of a DME supply company were charged with submitting false claims to Medicare for reimbursement of orthotic devices and other DME where there was no medical necessity for the DME device prescriptions.
These are just a few examples of a number of prosecutions that have recently been filed by Federal prosecutors.
Defenses to Durable Medical Equipment Fraud Charges
As may be apparent from the use of such words such as “knowingly” and “willfully” in the above statute summaries, Durable Medical Equipment Fraud charges require that the defendant have acted with fraudulent intent.
Actions premised on a good faith belief in the necessity of a DME prescription or request for reimbursement will offer defense to such criminal charges.Likewise, actions resulting from office clerical errors or mistaken identity are defensible.
This non-inclusive list of possible defenses is just a starting-point.
If you are charged with Durable Medical Equipment Fraud, it is vital to speak to a white-collar criminal defense attorney immediately discuss further possible defenses, such as lack of sufficient evidence, duress, or other such arguments.
Civil or Criminal Liability Possible for DME Fraud
It is important to note that those accused of Durable Medical Equipment Fraud may not only be criminally liable but may also be subject to civil liability.
“Qui tam” lawsuits may be brought by whistleblowers on behalf of the U.S. Government for the recovery of damages in fraud cases.
Likewise, the Government may itself bring a civil lawsuit for money damages and recovery of Medicare funds paid under fraudulent circumstances.
Charged with Durable Medical Equipment Fraud? Contact Us!
Burnham & Gorokhov, PLLC are experienced white collar criminal defense attorneys with the skillset you need to defend yourself against charges of Durable Medical Equipment Fraud. Contact us to discuss your options.