As we have pointed out in numerous blog posts of past, kickbacks are a form of bribery. The act is defined as when a person or company provides financial incentives or other benefits to another party in exchange for preferential treatment or business opportunities. Kickbacks can undermine fair competition and market efficiency. They distort the decision-making process by having paid individuals favor certain parties over others.
This week, the District of New Jersey branch of the U.S. Attorney's Office reports that a 49 year-old Ohio man has pleaded guilty to participating in a kickback scheme. As the report reveals, marketing company owner, Mark Belter entered his plea via videoconference. He admitted to conspiracy to violate the Federal Anti-Kickback statute and conspiracy to commit health care fraud.
Belter participated in a scheme with pharmacies, telemedicine companies and doctors.
Between June 2017 and September 2020, Belter encouraged his co-conspirators to submit false claims to health care benefit programs. They included Medicare and TRICARE. In return, he promised them all kickbacks and other bribes. As the controller of numerous marketing companies, Belter coerced his team to identify Medicare and TRICARE beneficiaries in order to target them for expensive drugs.
“The marketing companies called beneficiaries to pressure them to agree to try expensive medications, regardless of medical necessity,” details the report, “Belter and others would deliberately conceal the name of the prescribing doctor – whom the beneficiary had never met before – to increase the likelihood that the beneficiary would agree to accept the medications. Portions of the telephone calls were recorded.”
Belter and his companies paid kickbacks to the telemedicine companies.
Those companies then paid the kickbacks to doctors so that they could obtain prescriptions for the medications. To assist with the scheme, Belter sent the telemedicine companies the medical information of the beneficiaries, telephone call recordings and pre-marked prescription pads for particular drugs. The objective was to garner the highest reimbursements possible. Particular drugs were chosen for the prescriptions based mainly on reimbursement amounts and not medical need.
The doctors receiving kickbacks signed the prescriptions regardless of medical necessity. In many cases, they didn’t even speak to the patients who received the prescriptions. The prescribed meds were then sent to pharmacies where Belter had made other kickback arrangements. The pharmacies then submitted claims for reimbursement to health care benefit programs including Medicare and TRICARE.
Belter and his companies received a portion of the proceeds generated through the conspiracy.
“In total, Belter and his conspirators caused the submission of false and fraudulent claims to health care benefit programs totaling in excess of $24 million of prescription drugs,” explains the U.S. Attorney’s Office, “Belter and his companies received kickbacks and bribes totaling more than $6 million in exchange for prescription referrals to a pharmacy located in New Jersey.”
Belter faces up to five years in prison for each conspiracy charge. He will also have to pay fines, restitution and penalties for both the health care fraud and kickback counts. Both charges are punishable by a fine of $250,000, or twice the gross gain or loss from the offense. Belter will be sentenced on September 27, 2023.
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