A couple from Arizona have pleaded guilty to $1 billion in fraudulent healthcare claims.
The couple, Alexandra Gehrke and Jeffrey King, both of Phoenix, entered a guilty plea for making false and fraudulent claims to Medicare and other health insurance programs.
These programs included Medicare, one of the most frequently used medical and insurance frameworks nationwide. TRICARE, the health care program for U.S. service members and their families, and CHAMPVA, the program for spouses and children of permanently disabled veterans.
The case was investigated by the Department of Health and Human Services Office of Inspector General (HHS-OIG), the Defense Criminal Investigative Service (DCIS), the Department of Veterans Affairs Office of Inspector General (VA-OIG), and the Federal Bureau of Investigations (FBI).
$1BN healthcare fraud couple plead guilty
According to court documents presented by the investigating parties, the couple ran the medical fraud scheme alongside multiple conspirators. They used two companies, Apex Medical LLC and Viking Medical Consultants LLC, both owned and operated by Gehrke.
Both companies employed sales representatives to contact patients, most of whom were elderly, and a collective were veterans. These vulnerable individuals were contacted by these salespeople looking for patients “who had wounds at any stage and order amniotic wound grafts from a specific graft distributor.”
Gehrke dangled financial incentives in front of the unqualified sales representatives to ensure that medical providers were billed for wound treatment and orders for wounds much larger than 4×6 centimeters or larger. No matter the size of the wound.
The Justice Department said of the chain of medical fraud that Gehrke “received over $279 million in illegal kickbacks from the distributor of the grafts in exchange for the orders. Gehrke in turn paid the sales representatives tens of millions of dollars in unlawful kickbacks. Gehrke then referred the patients to a company co-owned by King, which contracted with nurse practitioners to apply the grafts.”
Gehrke pleaded guilty to conspiracy to commit healthcare fraud and wire fraud and King pleaded guilty to conspiracy to commit healthcare fraud and wire fraud. The couple has agreed to pay $614,990,420 and $605,690,110 in restitution.
According to court documents, the government has recouped “nearly $100 million in assets that Gehrke and King accumulated from the scheme, including bank account balances exceeding $68 million.”
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