Kansas Executive Sentenced for $1 Billion Medicare Fraud Scheme
A Kansas-based executive has been sentenced to 19 years in prison for orchestrating a $1 billion fraud scheme against Medicare and other federal health care programs.
Brett Blackman, the former CEO of HealthSplash, led a complex operation that exploited a fraudulent platform called DMERx to generate false doctors’ orders and prescriptions. The scheme targeted numerous Medicare beneficiaries, convincing them to accept unnecessary orthotic braces and other items, which led to over a billion dollars in fraudulent billings. These falsified orders facilitated widespread fraud through a network of telemedicine doctors, DME suppliers, and marketers who colluded to submit false claims, resulting in over $450 million in Medicare payouts based on these fraudulent submissions.
Key Details of the Fraud Scheme
The fraudulent operation capitalized on the integration of telemarketing systems and manipulated medical orders to sidestep audits and prevent detection. Notable is Blackman's use of sham contracts to disguise operations and avoid scrutiny. The scheme affected over 346,000 Medicare beneficiaries, with each typically receiving multiple billing entries for braces. Blackman's conviction includes numerous charges related to health care fraud and receiving kickbacks, and he faces further financial penalties.
| Agency | Role | Contribution |
|---|---|---|
| HHS-OIG | Investigation | Conducted investigations into fraudulent activities |
| FBI | Investigation | Uncovered extensive fraud network |
| VA-OIG | Investigation | Supported uncovering fraud schemes |
| DCIS | Investigation | Assisted in technical assessments |
Broader Implications for the Industry
This case underscores the vulnerabilities within federal health care benefit programs and highlights ongoing efforts by the Department of Justice and its Health Care Fraud Strike Force Program to combat such illicit activities. Since its inception in 2007, the initiative has been instrumental in indicting over 6,200 individuals involved in fraudulent billing practices. Insurance professionals, particularly in compliance and claims management, must remain vigilant against such fraud schemes that can heavily impact federal health care programs and the integrity of billing processes.