Healthcare CEO sentenced to 19 years for role in $1B Medicare fraud scheme
The CEO of a medical device company supposedly focused on providing patients with motorized assistance, such as power wheelchairs, has been sentenced to 19 years in prison after a jury convicted him of healthcare fraud in April.
Brett Blackman, 43, from Kansas operated the “internet platform” that the U.S. Department of Justice (DOJ) said “generated false doctors’ orders and prescriptions” for the purposes of defrauding federal government health programs, particularly Medicare.
In a statement, the agency said Blackman’s scheme, which involved multiple coconspirators, also defrauded the Department of Veterans Affairs (VA), as many of the prescriptions for medical devices were purported to be for former members of the armed services.
Over the course of the conspiracy, Blackman, et al. targeted hundreds of thousands of Medicare and VA insurance beneficiaries, pushing them to accept unnecessary assistive devices of all kinds, including orthopedic braces.
Despite the lack of medical necessity, the costs of this equipment were billed to the government under false pretenses, authorities said.
To make the scheme possible, prescriptions generated by Blackman’s bogus company, HealthSplash, were sent to telemedicine doctor coconspirators, who would sign the orders in exchange for kickbacks.
Over time, the government was billed for more than $1 billion in largely unnecessary medical equipment, the DOJ added.
The fraud began sometime in 2017, after Blackman’s HealthSplash purchased Power Mobility Doctor Rx (DMERx), which previously operated as a legitimate Internet-based business for acquiring durable medical equipment.
Also involved in the scheme were marketers and pharmacies, who also engaged in illegal activity in exchange for a part of the money paid out by Medicare and other federal programs, the DOJ said in a previous statement released in March.
Blackman took a cut for himself as part of the intricate referral operation, buying himself luxury purchases, authorities added.
“The DOJ and our agency partners dismantled one of the largest telemedicine fraud schemes ever, and yesterday’s lengthy prison sentence holds the orchestrator of that scheme accountable,” Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division, said in a statement. “The defendant’s fraud scheme lured hundreds of thousands of elderly and disabled Americans into a sophisticated international telemarketing system with one goal: stealing as much as possible from the Medicare trust fund. The Fraud Division will continue to leverage its resources to take down complex fraud operations like Blackman’s DMERx.”
Undercover operation
At Blackman’s 23-day jury trial, testimony and evidence was centered around undercover federal agents who interacted with DMERx under the pretenses of being a Medicare beneficiary. After receiving calls that pressure the operative into agreeing to receive multiple orthopedic braces, the agents were allegedly able to gather evidence for how the scheme operated.
In one incident revealed at trial, a doctor signed an order, confirming he performed exams on the undercover agent that showed there was a medical need for an assistive device. However, the agent testified he never received such an exam, which would have required an in-person visit.
Prescriptions originated from Blackman’s company, which connected with durable medical device companies to fill orders, evidence at trial showed.
Medicare and government insurance programs paid out more than $450 million during the course of the scam, the DOJ revealed.
At the conclusion of the trial, Blackman was found guilty of conspiracy to commit healthcare fraud, conspiracy to pay kickbacks, and conspiracy involving making false statements related to healthcare matters.
Other coconspirators linked to the scam have also been indicted and are serving prison terms.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.