Freewheeling Fraud

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Today’s fraud offers a lesson for all the soon-to-be high school and college graduates: Carefully choose your opportunities to prove your worth in the workplace. (In plain language: Don’t let a bad boss turn you into a fraudster.) The Standard-Examiner reports that the owner of a Salt Lake City medical equipment company scammed Medicare into paying false claims on $20 million worth of unneeded wheelchairs by coercing his employees into altering patients’ medical charts.

Medicare only covers the costs for medical equipment it deems a medical necessity for patients, and it puts the burden on doctors and equipment providers to prove a patient’s need before it will pay for equipment such as a wheelchair. Apparently, this Utah medical equipment provider thought he could make a quick buck (well, $4 million bucks for his part of the conspiracy) off of Medicare, by inflating the number of patients who were actually in need of a wheelchair. But he didn’t do the dirty work himself. Instead, he pressured his ”young, inexperienced” sales representatives to meet unrealistic quotas, which they did by falsifying or even creating medical records, and used this fraudulent documentation to increase Medicare claims and subsequent reimbursements. (Not exactly good for the resume.)

But federal authorities caught up with the scheme. The equipment company owner pleaded guilty in federal court to three counts of conspiracy to commit health care fraud, a felony, and his sales representatives each pleaded guilty to one count of conspiracy to commit health care fraud. The owner was sentenced to five years in prison, followed by three years of probation and ordered to pay $4 million in restitution—$1 million of which he repaid upon sentencing. (Just $3 million to go!) One sales representative will be imprisoned for six months; another for four months; and the third received 36 months of probation. They were ordered to pay restitution of $957,055, $585,786 and $230,910, respectively. Each of their restitution amounts is equal to the false Medicare reimbursements that resulted from their personal manipulation of medical records. (Perhaps it’s time for a career change?)

Source: Today’s ”Fraud of the Day” is based on, ”Fruit Heights man to serve 5 years in federal prison for Medicare fraud,” a report written by Taylor Hintz and published by Standard-Examiner on April 21, 2016.

SALT LAKE CITY — The former owner of a medical equipment company in Salt Lake City has been sentenced to serve 5 years in federal prison for pressuring employees to meet a quota of wheelchair sales that resulted in falsified physician charts.

Jacob Kilgore, 36, of Fruit Heights was sentenced April 14 by U.S. District Judge David Nuffer on three felony counts of conspiracy to commit health care fraud, to which he pleaded guilty in November 2015, according to court records.

Following his 5 years in prison, Kilgore will be on supervised release for 3 years, and he is also ordered to pay $4 million in restitution.

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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.