The owner of a telemedicine company is potentially on the hook for tens of millions of dollars after being connected to a fraud scheme involving durable medical equipment (DME).
Specifically, the owner of Expansion Media and Hybrid Management Group has been charged in a $110 million telemedicine fraud scheme involving medically unnecessary DME, including orthotics such as back and knee braces, according to the Massachusetts U.S. Attorney’s Office. The owner – a 40-year-old man from Parkland, Florida – has agreed to plead guilty to one count of conspiracy to commit health-care fraud.
An official hearing has not yet been set.
“The details contained in the charging documents are allegations,” the attorney’s office wrote in a Feb. 16 announcement. “The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.”
Officials are alleging that the telemedicine owner – via Expansion and Hybrid – entered into pay-to-play business relationships with telemarketing groups targeting Medicare beneficiaries with the goal of generating DME orders.
“To arrange for these orders to be signed, [the owner] allegedly worked with medical staffing companies – including one in Massachusetts – to find doctors and nurses who were willing to review and sign prepopulated orders, typically without any contact with the beneficiaries,” the Feb. 16 announcement detailed. “It is alleged that the records falsely portrayed the medical providers as having performed a legitimate examination of the beneficiary.”
In turn, Expansion Media and Hybrid Management Group allegedly provided signed orders to the telemarketers, which then sold the orders to DME suppliers.
Conspiracy to commit health-care fraud can lead to a sentence of up to 10 years in prison, supervised release for up to three years, and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater.
Across the health-care sector, 2024 has seen an increase in watchdog activity related to fraud, waste and abuse.
The U.S. Department of Justice (DOJ) Civil Division released its annual fraud report last week. In it, DOJ flagged several False Claims Act (FCA) settlements and judgments – totaling a whopping $2.68 billion for fiscal year 2023.
“As the record-breaking number of recoveries reflects, those who seek to defraud the government will pay a high price,” Principal Deputy Assistant Attorney General Boynton, head of the Justice Department’s Civil Division, said in a statement.
Of the more than $2.68 billion in FCA settlements and judgments, more than $1.8 billion related to matters that involved the health-care sector.
