A 22-year-old man from Port Richey, Fla. has pleaded guilty to charges he and others paid kickbacks and bribes as part of an elaborate $39.5 million Medicare fraud operation.
Christopher Spellman and his co-conspirators in this DME kickback scheme, owned and operated Dimon Business Solutions, LLC, which posed as a legitimate durable medical equipment (DME) management business.
The DME Company
The company operated a nationwide network of six DME suppliers that were involved in the DME kickback scheme. The companies were in New Hampshire, Florida, Texas, California and Pennsylvania. The case was brought in federal court in New Hampshire where two of the DME companies were located.
The Scheme
It was alleged in the DME kickback scheme, that Spellman and the others hid their ownership interest in the DME suppliers by using nominee owners. These “owners” agreed to buy the DME companies on behalf of Spellman, Dimon and the unnamed co-conspirators. They provided the money to purchase the DME companies and coached the nominee owners through the purchases, according to court documents.
According to the plea agreement, Spellman didn’t want his name linked to any new DME companies “due to his prior operation of another DME company (Origin Medical LLC in West Palm Beach) in 2022.”
Spellman and his co-conspirators violated the False Claims Act by paying kickbacks and bribes for signed doctors’ orders prescribing orthotic braces that were not eligible for reimbursement by Medicare, not medically necessary, or not provided as represented. “The defendant and his co-conspirators disguised the fact that they were purchasing doctor’s orders by using sham invoices,” according to the plea agreement.
The alleged crime took place between October 2023 and May 2024. Of the $39.5 million in claims submitted, Medicare paid at least $23.8 million to Spellman and his co-conspirators’ companies.
The Penalties
Spellman was charged on July 17, 2024, and faces sentencing in November. He could receive up to 10 years in prison, 3 years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on U.S. sentencing guidelines and statutes governing the determination of a sentence in a criminal case.
In June, the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) noted that “Each year, Medicare payments for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) top more than $7 billion in traditional Medicare alone.”
Watchdog Agency to Review DME Fraud
As part of its Work Plan, the watchdog agency said it would review current fraud schemes and the steps that the Centers for Medicare & Medicaid (CMS) have taken to prevent fraud and abuse.
“These findings will result in multiple products. The first product will look at billing for DMEPOS in Medicare Advantage, specifically by suppliers that are not enrolled in Medicare fee-for-service,” OIG stated.
OIG updates its Work Plan each month and conducts audits and evaluations based on areas most in need of attention. It’s expected to release its report next year.
How We Can Help
In some cases, healthcare providers become embroiled in this type of fraud without knowing that they are being taken advantage of or that they are taking part in a crime. Before entering into any agreement, you should contact a qualified healthcare law attorney.
Our firm represents healthcare professionals in state and federal court who are charged with fraudulent billing, kickbacks, Medicare, Part D and Medicaid fraud and false claims, among others. Our team of highly skilled attorneys and consultants are here to help you before you become the focus of an investigation and will aggressively defend you should you become the target of one.
For more information, contact us at 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.
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