U.S. Attorney Totten Announces Second Wave Of Enforcement In Nationwide Telemedicine Fraud Schemes

Press Release

Operation "Happy Clickers" Results in Resolutions with Five More Doctors for Allegedly Authorizing Fraudulent Medicare Spending

<_w3a_listitem listvalue="Choose an item."><_w3a_listitem listvalue="GRAND RAPIDS" datavalue="GRAND RAPIDS"><_w3a_listitem listvalue="KALAMAZOO" datavalue="KALAMAZOO"><_w3a_listitem listvalue="MARQUETTE" datavalue="MARQUETTE"><_w3a_listitem listvalue="LANSING" datavalue="LANSING"> GRAND RAPIDS - U.S. Attorney for the Western District of Michigan Mark Totten today announced criminal convictions and civil settlements against a second wave of doctors who participated in nationwide telemedicine fraud schemes by ordering medically unnecessary orthotic braces and genetic testing, allegedly wasting Medicare dollars to line their own pockets. These resolutions were achieved through Operation "Happy Clickers," a joint initiative between the U.S. Attorney's Office, the U.S. Department of Health & Human Services' Office of the Inspector General (HHS-OIG), and the Federal Bureau of Investigation (FBI) (see prior enforcement announcement here). The enforcement actions announced today include civil settlements with five doctors and criminal convictions against two of them.

"Over the last five years, fraudsters have operated nationwide telemarketing schemes to defraud the Medicare Program of billions of dollars by preying on older adults to solicit orders for medically unnecessary braces and genetic testing," said U.S. Attorney Mark Totten. "These schemes worked only because physicians checked their training and oaths at the door and click-signed medical orders without an appropriate medical review. My office will continue to work with our law enforcement partners to hold medical practitioners responsible for participating in these schemes."

As part of this second wave, Theresa Kordish, D.O., of Kalamazoo, MI, and Utibe Effiong, M.D., formerly of Mt. Pleasant, MI, each pleaded guilty to one count of making a false statement relating to health care matters. Both doctors admitted using a telemedicine program to authorize medical orders for patients they never met or examined, approving most orders in mere seconds. In addition to their criminal convictions, each doctor also agreed to pay civil settlements for their conduct based on the scope of the fraudulent orders each signed and on ability-to-pay considerations. Dr. Kordish agreed to pay $50,000, and Dr. Effiong agreed to pay $150,000.

The United States also reached civil settlements with three other physicians. Derek Grossman, D.O., of Traverse City, MI, agreed to pay $295,192.93 to resolve allegations that he used a telemedicine program to order over 1,300 medically unnecessary orthotic braces. Pedro Toweh, M.D., of Battle Creek, MI, agreed to pay $85,822 to resolve allegations that he likewise ordered over 800 medically unnecessary braces. Aaron Willen, D.O., formerly of Kalamazoo, MI, agreed to pay $80,000 to resolve similar allegations regarding several hundred orthotics claims based on ability to pay.

Dr. Kordish is scheduled to be sentenced on February 10, 2025. Dr. Effiong is scheduled to be sentenced on February 18, 2025.

These actions follow nationwide takedowns of so-called "marketers" and owners of medical supply companies and genetic testing laboratories, who worked together to conduct large-scale schemes to defraud Medicare. Details of earlier takedowns were publicized on April 9, 2019, September 27, 2019, and September 30, 2020. The marketers placed phone calls to Medicare beneficiaries, often through overseas call centers, to obtain enough information that they could fill out fraudulent medical orders for orthotic braces and genetic testing. The marketers then paid doctors to approve these orders through telemedicine programs for patients they never met in violation of federal healthcare laws. The marketers then sold the signed orders to medical supply companies and laboratories in violation of federal anti-kickback laws.

Federal investigators initiated these investigations based on a detailed review of Medicare data relating to these expensive braces and genetic tests, which sometimes exceed $8,000 per test, Including the criminal pleas and civil settlements, prosecutors handling Operation "Happy Clickers" have resolved cases against a total of nine separate doctors and nurse practitioners who were responsible for ordering over $10.5 million in alleged loss to the Medicare Program.

Through both rounds of enforcement actions, the United States has recovered over $1,000,000 for the Medicare Program in civil settlements, in addition to restitution that has and is expected to be ordered in the criminal cases. Almost all of these civil settlements were reached based on the inability of the defendants to pay higher amounts.

"Physicians and other providers who authorize medically unnecessary equipment and services undermine our health care system and waste valuable taxpayer dollars," said Mario M. Pinto, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General. "Our agency is committed to ensuring that those who engage in this conduct are identified and, in conjunction with our law enforcement partners, the resources of our judicial system are brought to bear."

"The convictions of several physicians involved in a nationwide telemedicine fraud scheme underline the FBI's commitment to holding those accountable who violate the trust of their profession," said Cheyvoryea Gibson, Special Agent in Charge of the FBI in Michigan. "By preying on the elderly and defrauding Medicare, these individuals betrayed their oath to uphold the highest standards of care and ethics; in turn, they exploited a vulnerable population for personal gain. Members from the FBI in Michigan, in coordination with the U.S. Department of Health and Human Services, will continue to investigate bad actors who undermine the integrity of our healthcare system and the trust placed in them by their patients and communities."

The resolutions obtained in this second-wave of enforcement actions in Operation "Happy Clickers" were the result of a coordinated effort between the U.S. Attorney's Office for the Western District of Michigan and HHS-OIG and the FBI.

The criminal cases were prosecuted by Assistant United States Attorney Patrick J. Castle and former Assistant United States Attorney Raymond E. Beckering III. Assistant United States Attorneys Andrew J. Hull and Nicole L. Mazzocco prosecuted the civil cases.

The claims resolved by the civil settlements are allegations only and there has been no determination of liability.

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Updated November 18, 2024