TRICARE is the health care program that offers comprehensive medical coverage to uniformed service members, retirees and their families. Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities and people with End-Stage Renal Disease. Also known as ESRD, it’s a condition involving permanent kidney failure that requires dialysis or a transplant.
These insurance programs are integral to the overall health and well-being of millions of Americans. Therefore, it should go without saying that defrauding these insurance programs is a heinous crime. 34 year-old, Brett Sabado is the perpetrator of such a crime. As a result, the Sandy Springs, Georgia resident has been sentenced to five years in prison and a payment of $950,000 to resolve False Claims Act violations. The sentence is to be followed by three years of supervised release.
Sabado submitted fraudulent claims for compound medications and DME.
As reported by the Northern District of Georgia branch of the United States Department of Justice yesterday, Sabado concocted a scheme to defraud both TRICARE and Medicare. He submitted false claims for compound medications and durable medical equipment. Compound medications are those that are made up of two or more drugs to create a medication tailored to a patient’s specific needs. They are not FDA-approved.
Durable medical equipment, or DME, refers to any medical equipment that is used in the home to aid in a better quality of living. According to information presented in court, Sabado and his co-conspirators received illegal kickbacks for TRICARE referrals and prescriptions of compound medication formulations. They included pain creams, scar creams and multi-vitamins. The scheme was devised to maximize profits.
Sabado operated NHS.
NHS is a pharmaceutical company. Sabado used it to coerce compounding pharmacies to submit false claims for prescriptions to TRICARE. The compounding pharmacies paid NHS a portion of the reimbursements they received from the insurance program. In turn, NHS paid a portion of its proceeds to healthcare marketing companies that pushed providers into prescribing these unnecessary compound medications.
“Sabado further executed the scheme by creating an online portal database used by NHS to facilitate the referral of prescriptions through NHS to the compounding pharmacies,” reports the DoJ, “Sabado and others at NHS used claims data to track the referrals made to compounding pharmacies and to invoice those pharmacies for the illegal kickbacks owed to NHS for the referrals. Sabado ultimately caused a loss of $4.5 million to TRICARE.”
Sabado also conspired with the owners of DME supply companies.
Together, they submitted fraudulent claims for medically unnecessary DME to Medicare. The equipment included arm, leg, back, wrist and neck braces. In addition, Sabado warehoused, packaged and shipped thousands of fraudulent DME orders to Medicare beneficiaries. He knew that that the DME orders were supported by sham prescriptions written by telemedicine physicians. In many cases, the doctors never even spoke with or examined the any of the Medicare beneficiaries they ordered DME for.
Regardless, Sabado continued to package and ship DME that Medicare beneficiaries neither requested nor needed. “For his part in this scheme, Sabado received between $5 and $15 for each medically unnecessary brace he shipped,” the DoJ reports, “Sabado also received a percentage of all Medicare reimbursement for the braces. Sabado ultimately caused a loss of almost $70 million to Medicare.”
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