Daniel Suarez, 24, was sentenced earlier this month to nine years in prison following his guilty plea to healthcare fraud and abuse charges. According to the Miami Herald, Suarez, a pharmacy technician, was involved in a family ring of Medicare fraud that involved submitting false claims to Medicare for prescription drugs. Medicare has been a victim of extensive fraud and abuse over the years, resulting in a greatly enhanced regulatory environment that, unfortunately, burdens all healthcare providers, honest and dishonest.
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The Medicare Program is funded by federal dollars and provides benefits and services for free (or low cost) to about 40 million elderly, blind or disabled, known as Medicare “beneficiaries.” Medicare has several different programs referred to as “parts.” The Medicare Part D Program subsidizes the cost of prescription drugs needed by Medicare beneficiaries. Beneficiaries enroll in Medicare drug plans, operated by private entities known as “sponsors” (insurers), which pay pharmacies for the beneficiary’s drugs and are, in turn, reimbursed by the Medicare Program.
Creative schemes to bilk the Medicare Program have been rampant. Healthcare fraud and abuse continue to cost the federal taxpayer staggering sums of money and, for that and other important reasons, remain a top priority of federal law enforcement. The federal government, through the United States Department of Health & Human Services/Office of Inspector General (OIG) and other federal law enforcement agencies, utilizes numerous methods to identify, combat and prosecute healthcare fraud. According to the OIG, as of September 20, 2015, $1.8 billion has been recovered by the federal government in healthcare fraud and abuse actions.
Suarez resides in Miami-Dade County, Florida. He owned and operated Alpha Pharmacy and Discount, Inc. (“Alpha”), a Florida corporation that did business in Miami-Dade County. According to the indictment, several other individuals (identified in the indictment) owned similar entities in the same area and conspired with Suarez. Suarez and the alleged co-conspirators were charged with federal health care fraud, 18 U.S.C. § 1347, among other offenses. The indictment alleges that Suarez and others, as co-conspirators, recruited and paid Medicare beneficiaries for their Medicare beneficiary numbers, to be used in filing false claims for benefits with the Medicare Part D program on behalf of Alpha and similar corporate entities. The fraudulent claims were submitted to Medicare via interstate wire, falsely representing that prescription drugs and other health care benefits were medically necessary, prescribed by a doctor and provided to the Medicare beneficiaries. According to the Herald, over $21 million was stolen from Medicare as part of the subject scheme to defraud Medicare. Suarez and his co-conspirators used proceeds from the false Medicare claims for personal purposes and to otherwise advance the fraud. The Herald reported that Suarez spent some of his healthcare fraud proceeds on two homes and a “fleet” of luxury cars that included a Rolls Royce Ghost and a Bentley. Federal prosecutors originally sought a 14-year sentence. In addition to a nine-year sentence, Suarez was ordered to pay back millions of dollars to Medicare.
Healthcare transactions and financial arrangements do not have to be as egregious as the fraudulent activities alleged in the Suarez indictment in order to constitute fraud and abuse under an applicable federal (or State) law. Many physicians and healthcare providers are investigated by federal law enforcement. The OIG encourages the reporting of suspected healthcare fraud by providing a Hotline that accepts tips and complaints from any source regarding potential healthcare fraud and abuse of federal healthcare programs.
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