Flashy Toys and Fraudulent Billings

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Pills spilling out of a prescription bottle on 100 dollar paper currency

Rehabilitation centers are intended to be a safe space for those who suffer from substance addictions. Medicaid typically covers the bills of recovery programs for those looking to detox from alcohol or drugs. 

Ohio businessman Ryan Sheridan owned and operated numerous companies dedicated to helping recovering addicts. Braking Point Recovery Center operated drug and alcohol rehabilitation centers that provided detox treatments, outpatient treatments, and inpatient residential programs.

Sheridan used the company to fraudulently charge Medicaid for $48 million in drug and alcohol recovery services that were not medically necessary nor provided to patients. These fraudulent billings violated the rules and regulations of the Ohio Medicaid Program and the Ohio Department of Mental Health and Addiction Services that Sheridan and his company agreed to adhere to as an approved provider.

Between January 2015 and October 2017, Sheridan caused the submission of fraudulent billings to Medicaid for rehabilitation services using codes that were more expensive than the services provided (that’s called upcoding), without proper documentation or diagnosis, billings based on quotas regardless if services were needed, and mislabeling of services among other violations. (Sheridan and his company exploited vulnerable addicts looking to turn a new leaf and begin their recovery journey.)

Sheridan’s staff was also instructed to distribute the same amount of the controlled drug Suboxone to every patient going through drug rehabilitation without them first being evaluated by a licensed physician. (Suboxone is a prescription medication used to treat adults who are addicted to or dependent on opioid drugs.) The company’s in-house physician used a DEA data waiver license he obtained from another physician to distribute over 3,000 doses of Suboxone without ever examining a patient. (Not only is this illegal, it’s medically reckless.)

Medicaid suspended payments to Braking Point in 2017 after fulfilling 134,744 fraudulent claims and paying the company over $31 million dollars. (This scheme finally reached its breaking point after investigators began to catch on to Sheridan’s illegal billing practices.)  

Sheridan pleaded guilty last October to one count of conspiracy to commit health care fraud, seven counts of health care fraud, one count of conspiracy to distribute Suboxone, twenty-two counts of use of another’s registration number to obtain controlled substances, one count of operating a drug premises, and twenty-eight counts of money laundering. (Quite the laundry list of offenses.)  

He was sentenced in January 2020 to seven-and-a-half years in prison and was also ordered to pay over $24 million in restitution. Sheridan was additionally ordered to forfeit $3 million in property which he obtained as a result of committing Medicaid fraud.

U.S. Marshalls will auction off Sheridan’s collection of automobile replicas used in the movies “Back to the Future,” “Ghostbusters,” and “Batman.” (Sheridan was living in one of these fantasy worlds if he thought he could get away with his crimes.) The profit from these expensive replicas will be used to return a portion of the money Sheridan stole from the U.S. Government.

Today’s Fraud of the Day comes from an article, ”A Medicaid scammer who stole millions is being forced to auction his replica movie cars, including a DeLorean and a Batmobile — take a closer look,” published by Business Insider on August 1, 2020.

Additional Link: https://www.justice.gov/usao-ndoh/pr/braking-point-recovery-center-owner-sentenced-7-12-years-prison-health-care-fraud-and

Government agencies hold auctions all the time, whether it’s to get rid of surplus or sell seized property. But it’s not every day that the Feds are looking to sell a handful of iconic 1980s movie-car replicas.

On Saturday, through Skipco Auto Auctions, the US Marshals Service will auction off replicas of the Batmobile from 1989’s “Batman,” the Ecto-1 from 1984’s “Ghostbusters,” and the time-traveling DeLorean DMC-12 from 1985’s “Back to the Future.” All the cars come from the collection of Ryan Sheridan, who was sentenced to more than seven years in prison earlier this year in a multimillion-dollar Medicaid scam.

 

 

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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.