On Friday, February 26, 2010, a federal jury in Los Angeles found Maria Nela Moreno of Fresno guilty of conspiracy to commit health care fraud and six counts of health care fraud. The jury found that she committed Medicare fraud by recruiting patients for the purpose of receiving unnecessary power wheelchairs.
U.S. District Court Judge John F. Walter presided over the case. Sentencing is scheduled for May 10 before Judge Walter. Ms. Moreno faces a maximum penalty of 10 years in prison and a $250,000 fine for each count of conspiracy and health care fraud for which she was convicted.
This case is a lesson in itself of how Medicare fraud occurs at every level -- from the recruitment of patients, to examination of patients, to purchasing prescriptions (or certificates of medical necessity) of power wheelchairs and how the patients are involved.
Factual Background Presented At Trial
Patient Recruiting. The evidence introduced at trial showed that Ms. Moreno allegedly solicited Medicare beneficiaries (patients) by meeting with groups of seniors and going door-to-door at low-income, senior living communities in Sanger and Parlier, California, near Fresno. The government claimed that Ms. Moreno recruited beneficiaries to receive expensive, high-end power wheelchairs that the beneficiaries did not need. Several beneficiaries testified that Ms. Moreno wore a badge with her picture on it that appeared to resemble a hospital identification badge.
According to the beneficiaries who testified at trial, Ms. Moreno "tricked them" into giving her their identification cards and Medicare insurance numbers by telling the beneficiaries that they should take a power wheelchair because Medicare would soon run out of money, and the beneficiaries would not be able to get a chair if the beneficiaries were to need them in the future. Ms. Moreno allegedly copied the beneficiaries' identification cards and Medicare insurance numbers with the portable scanner she carried with her.
Thus, the patients are in on the fraud even though they were not prosecuted in this case. The "trick" was simply to get them to ask for a wheelchair in advance when they did not need it.
The patient recruitment is targeted at senior communities offering "free" wheelchairs to Medicare beneficiaries. We all see this on late night TV commercials but this was more extreme. Sometimes, handouts such as free grocery store gift cards are provided to Medicare beneficiaries to "sweeten the deal."
If Medicare wants to stop these frauds from happening - they need to educate patients that it is fraud if they accept gifts for unnecessary medical services or equipment and that they can lose their benefits. Usually it is the low-income elderly (especially in the immigrant non-English speaking communities) that are targeted and for them an extra $25 or $50 is enough of an incentive.
Involvement of medical clinics. Usually one of the defenses available to the DME (durable medical equipment company) is that they received a valid prescription or order form from the medical clinic and that they cannot refuse to fill a valid physician order which states that there is medical necessity. Usually the medical clinics have a manager or employee complete the physician order and use a stamp or forge the physician's name. In this case, a couple of physician's testified that their identity was used for these wheelchair orders/prescriptions.
However, in this case, this potential defense was made more difficult when witnesses testified at trial that they took the beneficiary information they received from Ms. Moreno to a fraudulent medical clinic in Los Angeles, which then used the information to create bogus prescriptions.
Why would the medical clinics write prescriptions where there was no medical necessity? Usually it would be for money or for the referral of patients.
Black market for wheelchair prescriptions. DME companies are buying prescriptions. In Ms. Moreno's trial, witnesses testified that they purchased the fraudulent power wheelchair prescriptions and medical documents from the medical clinic. These witnesses were an intermediary between the clinics and the DMEs. Usually, the "purchase" of Medicare cards is not made by licensed doctors but by unlicensed, non-physician managers or secret owners or investors.
The witnesses testified that they then sold the prescriptions for more than $1,000 per prescription to DME supply companies in and around Los Angeles. These individuals do not have Medicare provider numbers or licenses. Even if these prescriptions for wheelchairs were needed and the wheelchairs are delivered to the patients -- the sale of the prescription would turn this into a false claim.
Lack of medical necessity. Ms. Moreno's defense was made more difficult when witnesses testified that at the Elderberry Apartments in Sanger -- one of the locations where Ms. Moreno and people who worked with her recruited beneficiaries to receive power wheelchairs -- many residents left the wheelchairs unused. This is evidence that there was no medical necessity.
In these type of cases, the DME delivers the power wheelchairs to patients. Often times, a photo is taken to document the fact that a power wheelchair was actually delivered to a Medicare beneficiary. However, if there is no medical necessity the fact that the wheelchair was delivered to the beneficiary will not be a sufficient defense.
How did Ms. Moreno get paid? The government contended that Ms. Moreno was paid a kickback for each power wheelchair that the DME companies were able to bill Medicare using the beneficiary information Ms. Moreno obtained and provided to the medical clinics .
One of the DME supply companies that billed Medicare using the identities of Ms. Moreno's recruits was Cooper Medical Supply of Canoga Park, California. Trial evidence was introduced contending that between January 2006 and September 2009, Cooper Medical Supply submitted approximately $828,835 in false and fraudulent claims to Medicare, almost all of which were for power wheelchairs.
Trial evidence was also introduced indicating that additional DME companies across southern California also purchased prescriptions that were from the beneficiaries recruited by Ms. Mareno. Cooper Medical Supply's owner, Ajibola Sadiqr, previously pleaded guilty to Medicare fraud and appears to have been cooperating with the government. Mr. Sadiqr's sentencing is currently scheduled for April 12, 2010.
Overbilling or Markup Medicare. The government contended that each of the power wheelchairs could be purchased for less than $1,000 wholesale and each sale resulted in approximately $6,000 in false claims to Medicare. Even if this was not used as grounds for charging Ms. Moreno, the fact helped the government show how the DME company had the extra money to pay referral fees for prescriptions.
In sum, at every level, all the players get a piece of the action. Those involved in these types of power wheelchair businesses often feel confident that there is no fraud since there is a prescription signed by a doctor and the wheelchair is actually delivered to a live elderly Medicare patient. They believe that there is "plausible deniability" because a wheelchair was actually delivered to the Medicare beneficiary. As we can see from the case of Ms. Moreno, the jury did not believe her defense and found there was proof beyond a reasonable doubt that she was involved in this conspiracy to defraud Medicare.
Posted by Tracy Green, Esq.
Any questions or comments should be directed to Tracy Green at tgreen@greenassoc.com.
The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and unlicensed individuals in insurance and health care fraud related matters in California and in other states, including New York and Florida. Their website is: http://www.greenassoc.com/
