Healthcare CEO Convicted of Massive Medicare Fraud
The CEO of a healthcare software company was convicted of bilking Medicare and other federal benefit programs out of more than $1 billion using fraudulent doctors’ orders.
79-year-old Gary Cox, who ran Arizona-based Power Mobility Doctor Rx, was found guilty on six counts by a federal jury in Miami.
“The defendant orchestrated a scheme to defraud government health care benefit programs on a massive scale, creating fraudulent doctors’ orders used to bill insurers over $1 billion,” said Department of Justice (DOJ) Criminal Division head Matthew R. Galeotti.
DOJ says the scheme involved people working at several levels both inside and outside of Cox’s organization, with one goal: submit false medical claims and grab the reimbursement for themselves.
“Fraud of this kind wastes taxpayer dollars and increases the cost of healthcare for all Americans,” said U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida.
Phony Platform Powered Scheme
Prosecutors say Cox and co-conspirators ran an internet platform known as DMERx, which generated false and fraudulent doctors orders. They then targeted Medicare beneficiaries and used call centers, TV ads, and mailings to get the beneficiaries to accept medically unnecessary treatments such as orthotic braces, pain creams, and other items.
The group then connected pharmacies, durable medical equipment (DME) suppliers, and others, with telemedicine companies who accepted kickbacks and bribes for the false orders transmitted on the DMERx platform. The telemedicine companies went on to bill Medicare and other insurers for more than $1 billion, with Medicare and insurers paying out more than $360 million. Meanwhile, Cox and his group received payments for coordinating these illegal kickback transactions and referring the completed doctors’ orders to the suppliers.
Court documents say Cox concealed the scheme through sham contracts and by eliminating words from doctors’ orders that would trigger a Medicare audit.
“By fraudulently billing the government for medically unnecessary durable medical equipment, the defendant not only violated the law but also assaulted the public’s trust placed in health care providers. There is zero tolerance for those who abuse federal health care programs,” stated Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG).
Cox was convicted of conspiracy to commit health care fraud and wire fraud, three counts of health care fraud, conspiracy to pay and receive health care kickbacks, and conspiracy to defraud the United States and make false statements in connection with health care matters.
He faces up to 60 years in prison. A sentencing date is not yet scheduled.
In addition to HHS-OIG, the FBI, the Department of Veterans Affairs Office of Inspector General (VA-OIG), and the Defense Criminal Investigative Service (DCIS) investigated the case.
