Monday, December 14, 2015

Medical Supply Company Owner Convicted in $4 Million Medicare Power Wheelchair Fraud Case in Los Angeles

The Medicare fraud cases relating to durable medical equipment (DME) companies allegedly providing power wheelchairs to patients who did not need them are not quite over. Just last month, a federal jury in Los Angeles on November 4, 2015, convicted a Los Angeles man and owner of a medical supply company for his role in an alleged $4 million Medicare fraud scheme. A sentencing hearing is scheduled for February 29, 2016, before U.S. District Judge S. James Otero of the Central District of California, who presided over the trial. 

According to evidence presented at trial, Valery Bogomolny, used his company, Royal Medical Supply, to bill Medicare $4 million between January 2006 and October 2009 for power wheelchairs (PWCs), back braces and knee braces that were medically unnecessary, not provided to beneficiaries or both.  The evidence the government presented further showed that Mr. Bogomolny created false documentation to support his false billing claims, including creating fake reports of home assessments that never occurred.  

Evidence at trial was presented that Mr. Bogomolny personally delivered PWCs to beneficiaries who were able to walk without assistance and signed documents stating that he had delivered equipment when the equipment was not actually delivered. Mr. Bogomolny's company ultimately received $2.7 million from Medicare on these alleged false claims.

The power wheelchair cases were aggressively prosecuted and the claims were over five years old. The government works on old evidence and with a long statute of limitation, we see cases being filed that have taken years to investigate or get to the grand jury. It is not uncommon for the cases to be filed right before the statute of limitation is set to expire. There should not be many more cases except those in the pipeline since Medicare began pre-approving power wheelchair claims in 2012.

Why did the government go after these claims so aggressively? Power wheelchairs exposed a soft underbelly in Medicare which pays claims first and then investigates later. In 2001, for example, Medicare paid for 3,100 power wheelchairs in Houston. In 2002, Medicare paid for 31,000. Given that people without credentials could open a DME, and there was a high profit margin (wheelchair that cost $900 could b sold for $5,000 to Medicare) and a lot of marketing - it was ripe for fraud. DME believed that with a prescription from a physician they would be immune from prosecution but that was not the case. 

Posted by Tracy Green, Esq.


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