5 Extreme Cases of Medical Fraud

By scoutadmin - February 26, 2016

Biggest Healthcare Fraud Cases of 2015

investigative case management

The healthcare industry is, unfortunately, unusually prone to cases of fraud. In 2015, a number of healthcare fraud cases made big news.

Below are brief summaries of five of these cautionary tales. Use Scout’s investigative case management software to help manage your cases.

$30 Million Health Clinics Medicare Fraud

Oscar Huachillo was sentenced this year to 87 months in prison and fined $3,454,244 restitution plus $31,177,987 forfeiture as a result of his arrest in 2013. Huachillo defrauded Medicare of over $31 million while evading over $3.4 million in federal income taxes.

His multiple healthcare clinics in New York City claimed to provide injection and infusion treatments to HIV/AIDS patients, but were merely healthcare fraud mills. They billed Medicare for medications that were never provided, were provided at extremely diluted doses, or were simply medically unnecessary.

Huachillo also managed to evade more than $3.4 million in taxes from 2009 to 2011 by underreporting his income, including the income from his fraudulent Medicare claims.

Healthcare Fraud & Money Laundering by Oncologist

Farid Fata, a Detroit hematologist and oncologist, was sentenced to 540 months in prison and forfeited $17.6 million after pleading guilty to 13 counts of healthcare fraud, one count of conspiracy to pay or receive kickbacks, and two counts of money laundering.

Fata owned a cancer treatment clinic, Michigan Hematology Oncology P.C. (MHO), with a number of Michigan locations as well as a diagnostic testing facility, United Diagnostics PLLC.

He prescribed and administered aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to 553 individual patients, billing Medicare and other insurance companies approximately $34 million in fraudulent claims for these unnecessary and harmful treatments.

Fata then used the proceeds to promote additional healthcare fraud at United Diagnostics, administering unnecessary and expensive positron emission tomography (PET) scans which he billed to a private insurer. Read more.

Medical Supply Company Medicare Fraud

Olufunke Ibiyemi Fadojutimi was sentenced to 48 months in prison and ordered to pay $4,372,466 in restitution for conspiracy to commit healthcare fraud, healthcare fraud and money laundering.

Fadojutimi, a registered nurse and former owner of Lutemi Medical Supply, fraudulently billed Medicare for more than $8 million of durable medical equipment that was not necessary. Fadojutimi and others paid cash kickbacks to patient recruiters and physicians for fraudulent prescriptions for medically unnecessary durable medical equipment such as power wheelchairs.

Fadojutimi then used these prescriptions to support fraudulent claims to Medicare. Fadojutimi and others submitted approximately $8.3 million in false and fraudulent claims to Medicare, receiving almost $4.3 million.

$23 Million Medicare Fraud Conspiracy Case

Jacinto Gabriel Jr. was sentenced to 120 months in prison and ordered to pay $23.3 million in restitution to the Medicare program and $1.5 million to the IRS for conspiracy to commit healthcare fraud and tax evasion.

Gabriel fraudulently obtained the confidential background information of hundreds of Medicare beneficiaries and used that information to sign them up as patients of Perpetual Home Health, Inc. and Legacy Home Healthcare Services, creating false patient records and doctor’s orders to support fraudulent Medicare claims.

He also made payments to doctors and others for referring patients and signed doctor’s orders to divert proceeds of the fraud scheme to himself through friends, associates and shell companies.

Pharmacist Sentenced for Multimillion Dollar Medicare/Medicaid Fraud

Purna Chandra Aramalla was sentenced to serve 36 months in prison, pay $7,503,605 in restitution to his victims, and file amended tax returns for the years 2010 through 2012.

A pharmacist as well as the owner and operator of A Fair Deal Pharmacy Inc., he defrauded Medicaid, Medicare and the New York State-funded AIDS Drug Assistance Program (ADAP) by purchasing and selling illegally diverted prescription drugs including HIV medication. Aramalla also filed false individual income tax returns and underreported his business income.

Unfortunately, these are just a few of the many fraud cases that were resolved over the past year.

It’s always important to keep up with the latest healthcare fraud and abuse laws to ensure that all claims are legal and all procedures, tests, medicines and equipment are both medically necessary and legally approved.

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