Trickle-down Effect

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The term ”trickle-down effect” is commonly used to describe an economic theory suggesting that tax breaks or government benefits received by businesses or wealthy citizens, will flow through to the needy and eventually improve the economy as a whole. The Advocate reports that government benefits were definitely flowing to two Slidell, La. residents, whose home health care business received $17.1 million in fraudulent Medicare benefits. Unfortunately, the people who deserved the benefits didn’t get them, while an additional $2 million in ill-gotten Medicare funds continued to trickle on down to multiple physicians and medical equipment business operators – all linked to the home health company.

The story details that the couple, a man and his ex-wife, owned a home health care business with two locations? New Orleans and Houma. (They couldn’t stand being married, but they were okay with committing fraud together.) The ex-wife also served as the firm’s director of nursing. Another alarming fact in the case includes the alleged murder of a key prosecution witness, who was a patient recruiter for the home health care business. The murder investigation is ongoing regarding the man who was shot to death.

The fraud case was investigated by the Baton Rouge Medicare Fraud Strike Force, who also linked the home health care business to other physicians and business owners in three Louisiana cities? Baton Rouge, Baker and Prairieville. One physician wrote fake prescriptions that amounted to more than $300,000 in Medicare benefits for power wheelchairs that were not needed. Another doctor charged Medicare for nearly $1.7 million in power wheelchairs through two different medical solutions providers. Both doctors admitted to receiving kickbacks from the home health care business for signing medically unnecessary prescriptions for the company’s patients.

The judge sentenced the man to a prison term of 15 years, while the ex-wife got a five-year term. They were both ordered to pay $17.1 million in restitution and forfeit $9.2 million in assets. At their sentencing – the two, who were both in their 60s – maintained that they were innocent. The man stated that he had never been involved in a crime, but he would take his punishment like a man. The woman said that the prosecution witnesses lied about her involvement in the scam. (It sounds like they are in denial to me.)

Thanks to the Medicare Strike Force, the government continues to crack down on the criminals who abuse the Medicare system and prevent the loss of billions of taxpayer dollars each year. The government benefits that trickled down to the fraudsters in this particular case eventually ran out and the perpetrators are facing a long dry spell while in prison.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Couple Sentenced in Medicare Fraud Case,” written by Bill Lodge and published in The Advocate on August 17, 2013.

BATON ROUGE – Two Slidell residents were sentenced Thursday in Baton Rouge to federal prison terms for health care frauds that cost Medicare $17.1 million.

Louis T. Age, 64, was sentenced by U.S. District Judge James J. Brady to a prison term of 15 years. Age’s ex-wife Verna Age, 60, received a 5-year sentence. The judge ordered both to pay $17.1 million in restitution and forfeit $9.2 million in assets.

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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.