Florida Man Pleads Guilty in Multimillion-Dollar DME Medicare Kickback Case

An Orlando, Fla. man faces up to ten years behind bars for his role in a durable medical equipment (DME) kickback scheme in which he and his co-conspirators were paid approximately $2.1 million and caused losses to Medicare and other healthcare benefit programs of at least $3.6 million.

Patrick Fitchner pleaded guilty in New Jersey federal court to one count of conspiracy to commit healthcare fraud.

Use of Telemedicine Companies to Commit Healthcare Fraud

According to prosecutors, Fitchner and his co-conspirators solicited and received kickbacks and bribes in exchange for providing DME companies with completed doctors’ orders for medically unnecessary DME, such as orthotic braces. Fitchner and his conspirators used telemedicine companies to obtain these prescriptions for DME, and the DME orders were then fraudulently billed to Medicare and other healthcare benefit programs. The co-conspirators are identified as Steve Chicoy and Alexander Schleider.

Receiving Kickbacks for False DME Orders

According to the information filed in this case, Fitchner created the DME orders by identifying qualified beneficiaries in New Jersey and elsewhere using marketing call centers under his direction. Once those Medicare beneficiaries were identified, Fitchner and his co-conspirators used telemedicine companies to secure the DME orders, regardless of whether they were medically necessary.

Fitchner received kickbacks ranging from approximately $100 to $300 in exchange for each DME order depending upon the type of brace. DME companies provide knee, ankle, back, wrist, and shoulder braces.

Creating a Sham Agreement to Perpetuate Fraud

To conceal their scheme, Fitchner entered into a sham agreement with Schleider that claimed that Fitchner provided marketing services for the DME companies to provide them with “raw leads,†not actual orders, for durable medical equipment. The supply company would, according to the agreement, be paid a fixed annual fee and would be paid based on the number of marketing hours, and not based on DME orders.

What is a Kickback in Healthcare?

A kickback is the exchange of money or anything else of value meant to influence a healthcare provider to make decisions that may financially benefit the person offering the incentive.

“Violations of the Anti-Kickback Statute that involve durable medical equipment can jeopardize the supply of equipment and federal healthcare benefits for others,†said Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General. â€œIndividuals who participate in the federal healthcare system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.â€

Co-Conspirator Pleads Guilty to Healthcare and Wire Fraud

Schleider, who owned and operated the DME companies in New Jersey, pleaded guilty in June to one count of conspiracy to commit healthcare fraud and one count of wire fraud. Those companies provided knee, ankle, back, wrist, and shoulder braces to Medicare beneficiaries and beneficiaries of commercial healthcare insurance companies.

According to the information filed in the case, Schleider also committed wire fraud in connection with money made available in response to the COVID-19 pandemic. After one of his DME companies received $322,237 from the Department of Health and Human Services’ Health Resources and Services Administration (HRSA) Provider Relief Fund, Schleider fraudulently claimed that the DME company provided diagnoses, testing, and care for those with possible or actual cases of COVID-19 after Jan. 31, 2020.

In reality, the DME company had stopped billing for any services in April 2019. He also falsely claimed that the payment would only be used to prevent, prepare for, and respond to COVID-19, and that the payment “shall reimburse the recipient only for healthcare related expenses or lost revenues that are attributable to coronavirus.†Schleider did not use that money for those purposes but transferred them into other accounts and then used them to purchase real estate and vehicles, among other things.

Co-Conspirator Faces Prison Time and Fines

Sentencing in Schleider’s case is scheduled for Nov. 8, 2023. He faces up to ten years for the healthcare fraud case and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. The charge of wire fraud is punishable by up to 20 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. 

In addition to up to ten years in prison, Fitchner also faces a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. Sentencing in his case is scheduled for Jan. 9, 2024.

Defending Those Charged with Violations of the False Claims Act

The False Claims Act remains a powerful tool in combating this type of fraudulent activity. The Health Law Offices of Anthony C. Vitale has been representing clients under investigation for more than three decades. As a former prosecutor, Mr. Vitale knows what government investigators are looking for, and how to best prepare should you become the target of an investigation. In response to a government investigation our firm conducts a defense or internal investigation. The goal is to eliminate liability and minimize any potential damage to you or your company’s reputation and your ability to continue doing business. Making a mistake during an investigation may cost you not only time and money, but also your career and freedom. Give us a call at 305-358-4500 or email info@vitalehealthlaw.com.