An Arizona health care software executive was sentenced Dec. 19 to 15 years in federal prison and ordered to pay more than $452 million in restitution for orchestrating a massive telemedicine fraud scheme that drained more than $1 billion from Medicare and other government health programs, according to a Dec. 22 press release from the Department of Justice (DOJ).
Gary Cox, 79, of Maricopa County received his sentence after a jury found him guilty earlier this year of operating an online platform that produced fake doctors’ orders that were then used to justify unnecessary braces, pain creams, and other products billed to federal insurers.
The scheme affected Medicare beneficiaries nationwide, especially seniors whose personal information was used to fuel it.
According to court records, Cox was the CEO of Power Mobility Doctor Rx, LLC, also known as DMERx. Prosecutors said Cox and his co-conspirators targeted hundreds of thousands of Medicare beneficiaries using deceptive mailers, television advertisements, and calls from offshore call centers. Many Medicare beneficiaries were persuaded to accept unnecessary products.
Cox’s company ran an online platform that produced false doctors’ orders, prosecutors said. The false orders claimed that physicians had examined and treated patients when they hadn’t actually done so. Doctors were then compensated to sign off after only a brief phone call, or with no patient interaction at all. In other cases, Cox’s company paid doctors to approve orders for patients without regard for medical necessity.
Acting like a middleman, federal authorities said Cox connected pharmacies, medical equipment suppliers, and telemarketers with telemedicine companies willing to accept illegal kickbacks and bribes in exchange for signed doctors’ orders transmitted through the DMERx system. Cox and his associates profited by brokering these deals and referring completed orders to companies that then billed Medicare.
The scheme resulted in more than $1 billion in fraudulent claims, with Medicare and other insurers paying out more than $360 million, according to evidence presented at trial. Prosecutors said Cox and others tried to conceal the fraud using sham contracts and by removing what one co-conspirator described as “dangerous words” from doctors’ orders that might trigger Medicare audits.
“This sentence sends a clear message: those who exploit telemedicine to prey on seniors and steal from taxpayer-funded health care programs will be held accountable,” HHS Deputy Inspector General for Investigations Christian Schrank said.
In June, Cox was found guilty 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. Friday’s sentencing marked the end of a lengthy federal investigation.
According to the press release, the DOJ’s Health Care Fraud Strike Force Program “has brought charges against more than 5,800 defendants accused of submitting over $30 billion in fraudulent claims to federal health programs and private insurers” since its launch in 2007.
