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Medicare fraud occurs when a hospital, nursing home, doctor's office, hospice care facility, ambulance service, pharmacy, rehabilitation center, or any other type of healthcare provider overbills Medicare.


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Owners of California durable medical equipment (DME) firm convicted of Medicare fraud
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In a July 17, 2009 press release, the US Department of Justice (DOJ) announced the conviction of the owners and operators of Los Angeles-based durable medical equipment (DME) firm of Medicare fraud.

A trial, lasting one week, ended up with the jury finding Gevork Kartashyan guilty of conspiracy to commit health care fraud and health care fraud. His co-conspirator and co-owner, Eliza Shurabalyan, was found guilty of health care fraud. The pair will be sentenced on October 5, 2009.

Court documents showed the pair owned and operated CHH Medical Supply, a DME supply company. From January 2005 to June 2008, the two, through CHH Medical supply, received almost $600,000 in Medicare reimbursement. They billed the large health care provider for almost $1 million. Almost all of the bills submitted were for medically unnecessary power wheelchairs and wheelchair accessories.

The trial revealed the workings of the scheme. Elderly Medicare beneficiaries were recruited and taken to medical clinics all over Los Angeles. In exchange for providing their Medicare details, some beneficiaries were promised vitamins, diabetic shoes or other items, which they never received.

The clinics made their money by providing fraudulent power wheelchair prescriptions which they sold to DME company owners who, in turn, would bill Medicare for the wheelchairs. The beneficiaries had no idea they were going to receive the wheelchairs, which none of them needed.

The clinics went even further. At trial, five physicians testified they never authorized or approved the power wheelchair prescriptions written under their names, many times by physician’s assistants. Three of the physicians said they never even worked at the clinics listed on phony prescription pads.

A government witness testified that Kartashyan would often come into the clinic office where he and others worked to pick up power wheelchair prescriptions that he had bought. Kartashyan would then create phony forms stating the beneficiaries’ homes were appropriate for the use of a power wheelchair, even though no home visit or home assessment was done.

Shubaralyan submitted all of the company’s Medicare claims. Power wheelchairs and accessories made up over 98 percent of the company’s Medicare billings.

This prosecution is another example of the effectiveness of the Medicare Fraud Strike Force. Federal prosecutors have indicted 257 defendants in Miami, Los Angeles, and Detroit since the start of strike force operations in March 2007. In total, these defendants are alleged to have fraudulently billed the Medicare program for more than $600 million.

The joint DOJ-HHS Medicare Fraud Strike Force is a team comprised of federal, state and local investigators whose sole work is to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.


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