The term “durable medical equipment” (DME) refers to any type of medical device that is used in the home in order to provide a better quality of living. Different types of durable medical equipment include catheters, hospital beds, iron lungs, oxygen tents, Nebulizers, Continuous Positive Airway Pressure (CPAP) devices and wheelchairs. Most insurance companies list such equipment among their benefits. Medicare often pays beneficiaries for their durable medical equipment.
According to the Medicare website, there are numerous types of durable medical equipment that are available for coverage. They include blood sugar meters, blood sugar test strips, canes, commode chairs, continuous passive motion devices, crutches, hospital beds, home infusion services, infusion pumps and supplies, lancet devices and lancets, patient lifts, suction pumps, traction equipment, wheelchairs, walkers and scooters.
Two DME company owners have been found guilty of fraud.
The Hagens of Arlington, Texas saw durable medical equipment as devices for a get rich quick scheme. They are now paying the price. As reported by the United States Department of Justice last week, 49 year-old, Leah Hagen and 54 year-old, Michael Hagen have both been convicted for their fraudulent activity involving DME. A federal jury found the couple guilty of one count of conspiracy to defraud the United States and to pay and receive health care kickbacks. They were also found guilty of one count of conspiracy to commit money laundering.
According to the evidence presented in their trial, the Hagens owned and operated two durable medical equipment companies: Metro DME Supply LLC (Metro) and Ortho Pain Solutions LLC (Ortho Pain). Both businesses operated out of the same location in Arlington. The DoJ report reveals that the duo paid a fixed rate per DME item in exchange for prescriptions and paperwork that was completed by telemedicine doctors. They were used to submit false claims to Medicare.
The Hagens paid out illegal bribes and kickbacks as part of their scheme.
“The defendants paid illegal bribes and kickbacks and wired money to their co-conspirator’s call center in the Philippines that provided signed doctor’s orders for orthotic braces,” reports the DoJ, “The evidence at trial showed emails exchanged between Leah and Michael Hagen and their co-conspirators showing a per-product pricing structure for orthotic braces but disguising their agreement as one for marketing and other services.”
As a result of their scheme, the Hagens were paid about $27 million of the $59 million they billed to Medicare Parts B and C. They wired millions of their illegal proceeds into their personal bank accounts which were both in the United States and overseas. The Hagens each face a maximum sentence of 25 years in prison when they are sentenced.
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