Diversion

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Fraudsters are masters at diversion. They often excel at hiding their crimes in mountains of paperwork figuring that government investigations don’t have enough staff or time to track down their transgressions. Such is the case for a Clinton, New Jersey man who ran a Medicaid fraud scheme through his West New York medical equipment supply store. He illegally billed the government healthcare program for more than $100,000 in medical supplies that were never delivered to patients.

A 2016 GAO report on the most common healthcare fraud schemes states that 42.6 percent of fraud cases in 2010 were due to the fraudulent billing of services or supplies that were not provided to patients. One of the most prevalent ways that criminals commit healthcare fraud today is by filing false insurance claims involving durable medical equipment (DME). (Just like today’s fraudster.)

DME includes a variety of items such as wheelchairs, scooters, walkers, oxygen supplies, nebulizers, incontinence supplies, orthotics, prosthetics and hospital beds for home use. Some of the most common ways DME providers commit fraud include: shipping equipment to patients before their doctor issues a prescription; billing for duplicate orders; shipping more than is needed; billing for more expensive items than those shipped; forging documents that only doctors can sign; and, billing for items never provided.

Now that you have a better understanding as to how DME fraud can occur, it’s important to know that over a period of eight years, today’s fraudster chose to fraudulently bill for compression stockings, diapers and other items that were never provided. (Many of the fraudulent bills were for patients that had died prior to the DME equipment distribution.)

Today’s criminal pleaded guilty to fraudulently billing the New Jersey Medicaid program for more than $100,000. As part of his plea agreement, he will pay $101,000 in restitution to Horizon New Jersey Health, the state’s Medicaid plan. The 42-year-old criminal also agreed to a lifetime disbarment from participating as a provider under the government healthcare program. When the fraudster is sentenced in January, he will be facing four years in state prison.

Even though this man tried to divert the attention of Medicaid investigators away from his scheme, his efforts ultimately failed. His crime against people who cannot afford health insurance or healthcare services has now diverted his life in a different direction than he had originally envisioned. (Now he has to face reality and take responsibility for his illegal actions.)

Today’s “Fraud of the Day” is based on an article entitled, Clifton Medical Supply Store Owner Admits To $100,000 Medicaid Fraud Schemepublished by South Passaic Daily Voice on August 21, 2017.

CLIFTON, N.J. — A Clifton man who owns a West New York medical equipment supply store has pleaded guilty to fraudulently billing the Medicaid program more than $100,000 for medical supplies never provided to patients, Attorney General Christopher S. Porrino and the Office of the Insurance Fraud Prosecutor (OIFP) announced.

Alfredo Valdes, Jr., who owns T-N-T medical supplies, pleaded guilty to second-degree charges of health care claims fraud and theft by deception in a hearing before Superior Court Judge Mitzy Galis-Menendez in Hudson County.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.