A California medical supply company owner ran a million-dollar scam charging Medicare for power wheelchairs he prescribed to patients who could walk on their own, according to the Justice Department. Jose Melendez, owner of Oceanside Medical Services, was sentenced to 18 months in prison for his role in the health care scam and ordered to pay nearly $600,000 in restitution.
Two doctors conspired with Melendez, according to the government. One, Irving Schwartz, wrote fraudulent prescriptions for the wheelchairs, receiving a $300 kickback for each one he wrote. The other, Gloria Hernandez, sold the prescriptions to Melendez for $1,000 each. Melendez then sold some of the prescriptions to other doctors for even more money.
The co-conspirators then billed Medicare for the wheelchairs, submitting more than $830,000 in false claims. Two others, who were charged separately, submitted more than $250,000 in claims using Schwartz's fraudulent prescriptions.
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A Tennessee medical supplier that processes Medicare claims incorrectly billed for almost $800,000 in therapeutic shoes for patients in Puerto Rico, according to the Department of Health and Human Services Inspector General.
The HHS-IG reviewed a sample of the 6,269 claims submitted by CGS Administrators between 2009 and 2010 worth a total of $1.5 million. Of the 100 claims reviewed, 62 were incorrectly billed, lacking physicians' orders or certification for the shoes, or proof of delivery. The incorrect orders totaled almost $14,000.
Based on the sample, the IG estimated CGS incorrectly billed Medicare for almost $800,000 for the shoes. CGS agreed to return $13,906 and said it would consider reviewing all claims for therapeutic shoes to determine how much it has incorrectly billed.
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Missouri family planning
The Missouri agency that handles the state's Medicaid program incorrectly charged more than $1.4 million for family planning sterilization in 2009 and 2010, according to the HHS IG.
The Missouri HealthNet Division charged Medicaid for the same services twice in some cases, and incorrectly calculated the cost of the service in others.
The federal government reimburses state Medicaid programs for 90 percent of the cost of family planning services, which includes contraception and sterilization.
The Missouri HealthNet Division incorrectly charged for sterilization because its process for identifying how much the services actually cost is ineffective, according to the IG. As a result, the agency overstated its costs by $1,480,516, which it plans to refund. The agency also said it would return almost $900,000 in additional incorrect charges it found in a closer review.
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