A South Florida advanced registered nurse has been sentenced to 20 years in prison and ordered to repay the government about $1.6 million for her role in a DME and genetic testing scheme. Prosecutors said she used her ill-gotten gains to buy expensive cars, jewelry, home renovations, and travel.
Elizabeth Hernandez of Homestead was indicted in April 2022 on ten counts relating to her healthcare fraud scheme. Five months later, she was convicted of one count of conspiracy to commit healthcare fraud and wire fraud, in addition to four counts of healthcare fraud and three counts of making false statements relating to healthcare matters.
The Healthcare Fraud Conviction
According to evidence presented at trial in this DME and genetic testing scheme, Hernandez, who was licensed in at least 28 states, including Florida, signed thousands of orders for medically unnecessary orthotic braces and genetic tests. The healthcare fraud scheme resulted in more than $200 million in false and fraudulent claims.
“In 2020, Hernandez ordered more cancer genetic tests for Medicare beneficiaries than any other provider in the nation, including oncologists and geneticists,” the Justice Department said in a news release following the jury’s verdict in September.
How the Healthcare Fraud Scheme Worked
As part of the healthcare fraud scheme, telemarketing companies would contact Medicare beneficiaries to convince them to accept orthotic braces and genetic tests. The companies then sent pre-filled orders for these products to Hernandez, who signed them, attesting that she had examined or treated the patients. However, she had never spoken with many of the patients, and she often had others, including non-licensed individuals, sign her name to the fraudulent DME and genetic testing orders. Hernandez also falsified information in the orders about beneficiaries’ symptoms and injuries.
She also took advantage of the COVID pandemic in 2020 when Medicare expanded its telemedicine coverage. Hernandez billed Medicare for thousands of telemedicine visits she never performed, often billing more than 24 hours of telemedicine visits in a single day.
Non-licensed Individuals Also Charged in Healthcare Fraud
Hernandez was not alone in the healthcare fraud scheme. According to the indictment, between August 2018, through June 2021 she worked with Michael Stein of Lake Worth and others by, among other things, soliciting and receiving kickbacks and bribes in exchange for signing doctors’ orders for orthotic braces and genetic testing that was medically unnecessary and not legitimately prescribed.
Stein was among 14 defendants charged in May 2021 for their alleged participation in various healthcare fraud schemes that exploited the COVID-19 pandemic and resulted in more than $143 million in false billings.
Co-conspirators Plead Guilty
In April, just before his trial was to begin, Stein pleaded guilty to his part of the healthcare fraud scheme. He was indicted in 2021. Stein ran two companies 1523 Holdings and Growthlogix that paid healthcare providers bribes and kickbacks to order genetic tests that were medically unnecessary. Stein was sentenced to five years in prison and ordered to pay $63.3 million in restitution to Medicare.
Another man involved in this DME and genetic testing scheme, Leonel Palatnik of Aventura was sentenced to nearly seven years. As part of his plea deal, Palatnik admitted that he paid $50,000 a month in kickbacks to Stein, in exchange for his arranging for telemedicine providers to approve genetic testing orders for patients at Panda’s labs which he co-owned. The orders were signed by Hernandez.
The Texas-based company operated two genetic testing labs that billed $90 million to the Medicare program and received $60 million in payments between April and November 2020.
COVID Task Force
In May 2021 the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.
In August, the DOJ announced the COVID Taskforce resulted in 718 enforcement actions – including federal criminal charges against 371 defendants – for offenses related to more than $836 million in alleged COVID-19 fraud.
How We Can Help
Being accused of participating in COVID-19 testing scams can severely damage one’s personal and professional reputation. Even if baseless, being accused of taking part in fraudulent activities can irreparably damage trust within the healthcare community and among patients.
It’s imperative that you work with experts who understand the complexities of the healthcare industry, the ever-changing legal landscape, and the need to differentiate between genuine providers and fraudulent actors.
The Health Law Offices of Anthony C. Vitale has been representing clients under investigation for more than 30 years. Our long-standing experience allows us to help clients to prepare for an investigation and to limit liability and minimize potential damage. For more information call us at 305-358-4500 or email info@vitalehealthlaw.com.
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