Billion-Dollar Medicare Fraud Scheme Exposed: CEO Convicted of Orchestrating Scam

Strategic Insights -

A federal jury in the Southern District of Florida has convicted the CEO of Power Mobility Doctor Rx, LLC, Gary Cox, of orchestrating a massive Medicare fraud scheme that generated false doctors' orders for medically unnecessary items, bilking the program of over $1 billion. Cox and his co-conspirators targeted hundreds of thousands of Medicare beneficiaries, using misleading mailers, television advertisements, and calls from offshore call centers to obtain their personally identifiable information and convince them to accept unnecessary orthotic braces, pain creams, and other items. The scheme involved connecting pharmacies, durable medical equipment suppliers, and marketers with telemedicine companies that paid kickbacks and bribes for signed doctors' orders, which were then used to bill Medicare and other insurers over $360 million.

Key Takeaways:

  • Gary Cox, 79, was convicted of conspiracy to commit health care fraud and wire fraud, three counts of health care fraud, conspiracy to pay and receive health care kickbacks, and conspiracy to defraud the United States and make false statements in connection with health care matters.
  • Cox's scheme generated over $1 billion in false claims against Medicare, with Medicare and other insurers paying out over $360 million as a result.
  • Cox and his co-conspirators used DMERx, an internet-based platform, to generate false and fraudulent doctors' orders for medically unnecessary items.
  • The scheme involved a network of telemedicine companies, pharmacies, and durable medical equipment suppliers who paid kickbacks and bribes for signed doctors' orders.
  • Cox's conviction brings the total number of defendants charged in the Health Care Fraud Strike Force program to over 5,800, with a combined total of over $30 billion in false claims.
  • The FBI and its law enforcement partners will continue to aggressively prosecute health care fraud schemes to hold criminals accountable, protect the vulnerable, and recover financial losses.

Statistics:

  • Over 1 billion dollars were generated in false claims against Medicare as a result of the scheme.
  • Over 360 million dollars were paid out by Medicare and other insurers in response to these claims.
  • Cox's conviction brings the total number of defendants charged in the Health Care Fraud Strike Force program to over 5,800.
  • The combined total of over 30 billion dollars in false claims charged in the Health Care Fraud Strike Force program since its inception in 2007.

Sources:

  • "CEO Sentenced in Medicare Fraud Scheme" (Justice Department press release)
  • "Health Care Fraud Strike Force Program" (Justice Department webpage)
  • "Medicare Fraud and Abuse" (HHS Office of Inspector General webpage)
  • "Health Care Fraud Prevention and Education" (FBI webpage)