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DME Fraud – How Individual Doctors Get Involved


If you check the news there are cycles of federal indictments for healthcare fraud. In the past physicians have faced charges in four major areas.

Billing Fraud: This occurs when healthcare providers submit false or inflated claims for reimbursement to insurance companies or government healthcare programs, such as Medicare or Medicaid. It may involve billing for services that were not provided, billing for more expensive procedures than those performed, or billing for unnecessary medical tests or treatments.

Kickbacks and Illegal Referrals: Healthcare fraud can involve illegal kickback schemes where providers receive financial incentives or benefits in exchange for patient referrals or the use of specific services or products. These kickbacks may result in unnecessary medical services or treatments being prescribed or referred.

Upcoding and Unbundling: Upcoding refers to intentionally assigning higher billing codes to medical services or procedures than what was actually provided. Unbundling involves billing separately for services that should be billed together as a package, resulting in higher reimbursements.

Phantom Billing: Phantom billing occurs when healthcare providers bill for services or procedures that were never performed. This can involve creating false records or billing for fictitious patients.

But these are isolated areas and each investigation involves a few physicians with a maximum generally of 10-15 (for large groups). For the past few years there has been a focus on durable medical equipment (DME) fraud. These cases generally involve large dollar amounts and dozens of physicians and related persons. They are easy for the government to prove and result in large reimbursements to the government.

DME fraud generally refers to fraudulent activities related to billing for durable medical equipment, such as wheelchairs, crutches, and medical supplies. It typically involves submitting false claims or engaging in other fraudulent practices to receive reimbursement from government healthcare programs like Medicare or Medicaid. Non-Medical companies often recruit patients from elderly populations, “old age” homes and other locations where a mix of social activities and recruiting of patients can take place. These patients have charts created and telemedicine doctors review the charts often prescribing various orthopedic braces, genetic testing and other high profit items and services. The patients are generally not in need for these items but government medical programs e.g. Medicare/Medicaid get billed.The physicians involved make little money, perhaps $ 10 per chart and the legal issue is often whether they understood that they were tools in an overall scam. The legal issue is intent.

Medical healthcare fraud refers to the intentional deception or misrepresentation by individuals or organizations within the healthcare industry, aiming to gain financial benefits or advantages. It involves fraudulent activities related to the provision of medical services, billing, or insurance claims. There are various intermediaries in these DME cases. Locums companies often provide the MD’s and MD’s often rely on the Locums companies to screen the employers.

The DME cases have taken precedence as the U.S. Attorney has found them easy to prove and prosecute. They have also gotten a significant financial reimbursement drawn mostly from the individual physicians.

The most recent round of DME Indictments are described HERE.

Learn more about the Horowitz Medical Fraud Defense Practice (CLICK HERE)

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