A man from Kansas has admitted to operating a fraudulent online platform that tricked Medicare and other federal health care programs into paying over $1 billion for unnecessary medical items.
Gregory Schreck, 50, from Johnson County, pleaded guilty to running an internet-based operation that generated false doctors’ orders for items like orthotic braces and pain creams, defrauding both Medicare and private insurers.
The Fraudulent Scheme Unraveled
Court documents reveal that Schreck, along with his co-conspirators, targeted hundreds of thousands of Medicare beneficiaries, manipulating them into providing personal information and agreeing to accept unnecessary medical supplies.
This was done through misleading advertisements, phone calls from offshore call centers, and mailers.
Schreck was a vice president at the company that operated the fraudulent platform, DMERx.
This platform was used to generate false doctors’ orders for items that were not needed, all while falsely claiming these items were medically necessary.
How the Fraud Worked
Schreck and his co-conspirators connected pharmacies, durable medical equipment (DME) suppliers, and marketers with telemedicine companies willing to pay bribes in exchange for doctors’ orders.
These orders were transmitted using the DMERx platform and were often signed by doctors who never examined the beneficiaries.
Some doctors even signed orders without any interaction with the patients at all, based solely on a brief phone call or sometimes no contact at all.
The DME suppliers and pharmacies then billed Medicare and other insurance programs, amounting to more than $1 billion in fraudulent claims.
Medicare alone paid out over $360 million based on these false claims.
The Consequences and Penalties
Schreck has pleaded guilty to conspiracy to commit health care fraud and faces up to 10 years in prison.
The final sentencing will be determined by a federal district court judge, who will consider the U.S. Sentencing Guidelines along with other statutory factors before making a decision.
Investigators and Prosecutors Involved
The case was announced by a group of key officials, including Antoinette T. Bacon, Supervisory Official at the Justice Department’s Criminal Division, and Isaac Bledsoe, Acting Special Agent in Charge at the Department of Health and Human Services Office of Inspector General (HHS-OIG).
Additional agencies, including the FBI, the Department of Veterans Affairs Office of Inspector General (VA-OIG), and the Department of Defense Office of Inspector General, have also been investigating this case.
A Long-Standing Effort Against Health Care Fraud
This case is part of the broader efforts by the Health Care Fraud Strike Force, led by the Fraud Section of the U.S. Department of Justice.
Since 2007, the program has resulted in over 5,800 defendants being charged for defrauding federal health care programs, totaling more than $30 billion in fraudulent claims.
The Centers for Medicare & Medicaid Services, in collaboration with HHS-OIG, is also taking steps to hold health care providers accountable for participating in fraudulent schemes.
The case serves as a reminder of the ongoing battle against health care fraud, with authorities determined to crack down on such schemes and protect taxpayer dollars.
This article was published on TDPel Media. Thanks for reading!
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