Owners of 2 DME companies get 12 years in prison for $27M fraud scheme: 4 details

Laura Dyrda -  

The owners of two durable medical equipment companies for orthopedic patients were sentenced to more than 12 years in prison for executing in connection with a conspiracy that cost Medicare $27 million.

 

Four details:

1. Leah and Michael Hagen were convicted July 8 of paying kickbacks and bribes to co-conspirators in the Philippines in exchange for signed doctors' orders for DME, according to a release from the Justice Department. The couple used the orders to submit false claims to Medicare on behalf of their companies, Metro DME Supply and Ortho Pain Solutions.

2. The Hagens signed sham contracts to disguise payments as marketing and business process outsourcing.

3. Medicare paid $27 million for medically unnecessary services that weren't provided as represented on the claims. In some cases, Medicare beneficiaries were offered gift cards if they accepted the braces.

4. The Hagens were sentenced to pay $27 million in restitution in addition to their prison sentence.

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