Florida Medical Supply Fraud Highlights Serious Insurance Compliance Issues

Florida Medical Supply Company Owner Admits to Fraudulent Billing Scheme

A Florida entrepreneur, Evelyn Herrera, has admitted to a fraudulent conspiracy that involved healthcare kickbacks, according to legal authorities. Herrera, as the owner of Merida Medical Supplies Inc., was implicated in a scheme linked to AI-driven prior authorization delays and false claims submitted to Medicare. The incident underscores critical issues in regulatory compliance requirements and risk management within the insurance industry.

Court records reveal that Herrera collected personal information from individuals across Vermont, New England, and other parts of the United States. Leveraging these identities, she filed fake claims for orthopedic supplies like wrist, knee, and back braces—none of which were requested by or provided to patients. These fraudulent claims amounted to approximately $6.5 million submitted to Medicare, with $2.8 million disbursed to Merida on false premises.

To disguise the origin of these funds, Herrera converted over $300,000 into cryptocurrency and made international wire transfers, including $125,000 to purchase property in Tulum, Mexico. This highlights the critical role of compliance in preventing such fraudulent activities. With her sentencing scheduled for May 11, she faces up to five years of imprisonment, as investigators, including the Department of Health and Human Services' Office of Inspector General and the FBI, pursue regulatory enforcement.

Investigations and Broader Industry Impact

The investigation was spearheaded by the Department of Health and Human Services' Office of Inspector General, in collaboration with the FBI. Assistant Attorney General A. Tysen Duva praised these collaborative efforts with the Department of Justice's Fraud Section in tackling healthcare fraud among providers and carriers. This case is part of the Health Care Fraud Strike Force's operations, established to tackle fraudulent practices across federal health care programs.

Since its inception in 2007, the Health Care Fraud Strike Force has charged over 5,800 individuals, resulting in capturing more than $30 billion in fraudulent claims, underscoring the importance of rigorous underwriting and effective claims management processes. For ongoing information and updates on efforts to combat healthcare fraud, visit the Department of Justice’s Fraud Division's website.