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DOJ Busts $3 Million Medicare Fraud Scheme

Cheryl Clark, for HealthLeaders Media, September 27, 2010

Three people pleaded guilty last week in a scheme to defraud Medicare $3 million in false claims for wheelchair purchases that were neither damaged by hurricane winds, as claimed, or medically necessary, the Department of Justice says.

According to the DOJ, the scheme involved Melvin Jean Barnes, Johnnie Lee Andrews and Monica Renee Perry. The first two admitted they were paid kickbacks in exchange for referring Medicare beneficiaries to Luant & Odera, a Texas durable medical equipment company.

Barnes admitted that he was paid kickbacks in exchange for delivering medically unnecessary durable medical equipment, which included power wheelchairs, wheelchair accessories and motorized scooters, the statement said. 

The defendants face a maximum prison sentence of 10 years.

After Hurricanes Katrina, Rita, and Ike, Medicare relaxed procedures to speed healthcare services to people in need by creating the CR Modifier, in which suppliers could be paid by Medicare even if the companies could not comply with normal program documentation requirements because of the hurricanes.

According to the DOJ statement, Andrews, Perry, and Barnes "admitted that they specifically knew that the durable medical equipment was not destroyed in a hurricane and not medically necessary. Luant & Odera submitted approximately $3 million in false and fraudulent claims to Medicare using the CR Modifier for the DME."

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