The Department of Justice periodically sends out memos identifying wins in its fight against healthcare fraud and abuse.
I’ll quote the DOJ verbatim.
Charges were filed in the District of Arizona against four individuals who allegedly filed $900 million in false and fraudulent claims to Medicare for amniotic wound grafts used on Medicare patients. As alleged, the defendants targeted elderly Medicare patients, many of whom were terminally ill. The defendants caused medically unnecessary and expensive amniotic grafts to be applied to these vulnerable patients’ wounds indiscriminately, without coordination with the patients’ treating physicians and without proper treatment for infection, to superficial wounds that did not need this treatment, and in sizes that far exceeded the size of the wound. In just 16 months, Medicare paid two defendants more than $600 million as a result of their fraud scheme, paying on average more than a million dollars per patient for these unnecessary grafts. These two defendants owned wound care companies in Arizona and received more than $330 million in illegal kickbacks in exchange for purchasing the grafts billed to Medicare. In connection with the charges, the government seized over $70 million, including four luxury vehicles, gold, jewelry, and cash.
“Every dollar saved by investigating fraud is critical to the sustainability of the Medicare program and the needs of the people who depend on it,” said Administrator Chiquita Brooks-LaSure of the Centers for Medicare & Medicaid Services (CMS). “In addition to the actions taken by the Justice Department, CMS took 127 administrative actions in the last six months separately against providers for their alleged involvement in health care fraud schemes. We thank our partners at the Department of Justice and Department of Health and Human Services Office of Inspector General for working closely with us to identify, investigate, and eliminate waste, fraud, and abuse in our federal health care programs.”
One phrase bears repeating – “paying on average more than a million dollars per patient for these unnecessary grafts.”
Separate reporting:
The owners of the wound care companies, Alexandra Gehrke and Jeffrey King, were arrested at the Phoenix airport as they were boarding a flight to London, perhaps attempting to flee the country. The article states that, “Gehrke and King lived lavishly off the scheme, prosecutors allege, citing luxury cars, a nearly $6 million home and more than $520,000 in gold bars, coins and jewelry.” Prosecutors said they seized more than $52 million from Gehrke’s personal and business bank accounts after her arrest.
Pics from the defendant’s February 25th wedding show them handsomely dressed.
Linkedin profile: “Experienced Founder with a demonstrated history of working in the medical device industry. Experienced in sales and marketing.”
I’ll say.
What do you think?
It seems as though a million dollars for a graft of any sort is a bit … pricy. But what do I know; I’m only a dentist. “insurers” of any ilk do their damdest not to pay even UCR, even after making the provider jump through a myriad of hoops. Why would Medicare pay out over one million dollars over 600 times without asking for justification many times over right from the start. Having gotten away with this the first time, of course Gehrke and King would continue. The only real “surprise” 9is that they didn’t quit and flee a lot sooner.
what amazes me is these cases of medicare fraud go on way to long before cms and the feds take action. They need to be more proactive than reactive. The software and AI capability to audit and stop medicare payment for schemes like this exist. They will recover 10 cents on the dollar of what was stolen. The defendants will get sentenced and likely pardoned just like the ophthalmologist Salomon Melgen who had a 20 some year life in the slammer pardoned by Trump (actually trump’s last pardon while in office )
Interestingly Melgen was tried with former NJ u.s. senator for kickbacks but a hung jury occurred and they were never retried. Fortunately, Menendez and i believe his wife were found guilty and await sentencing
Similar vibes with Endo Pharmaceuticals, who pitch a collagenase injection for Peyronie’s and Dupuytren’s contracture at $6,943 per injection. They sponsor lavish dinners and perks at national meetings. It has only mediocre benefits compared to other less expensive treatments. They jovially proclaim that the patient only pays $120 with insurance. MD is paid about the same. CMS however never questioned that $5,000+ price and keeps paying the company. Interestingly the manufacturer discontinued the drug in Europe as their regulators capped the price at $800!
$900MIL in payments for wound care with amniotic fluid sounds INSANE! How do so many disbursements from MCare go unnoticed? “Private” insurance would have denied the first claim. Our government is collapsing under its own debt. May God bless America.