May 16, 2022

Volume XII, Number 136

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Medicare Fraud Plea in Detroit Pill Mill Case

We have long said that medical clinics that hire patient recruiters are often engaging in Medicare fraud. Earlier this week I spoke to a gentleman in Detroit named "John" (not his real name of, course.) John is paid $50 per person plus expenses to recruit "patients" for a clinic. John drives a van and searches for homeless people in Detroit. When he finds a willing person, he feeds them and brings them to the clinic.

John pockets the $50 (in cash of course), the homeless person gets a free meal and medical therapy he or she doesn't need and we pay for it. That's right, because almost all homeless people are Medicaid or Medicare recipients, our tax dollars fund their care.

This week's guilty plea by Hussein "Sam" Awada is the most recent example of dangerous Medicare fraud plaguing the Detroit. And once again, patient recruiters played a big role. 

According to a thirty page affidavit by a DEA agent, Dr. Awada ran a clinic in Detroit called Midwest Family Practice. Over many months, DEA agents sent a number of undercover people into the clinic to obtain prescription pain killers. One operative told Dr. Awada that he was already buying street drugs but wanted a prescription. Awada gave the operative prescriptions for Vicodin and Roxicodone even though an x ray and physical exam showed no significant medical problems.

Ultimately Dr. Awada appears to have been tipped off about the investigation and began referring pain med patients to a different physician. Prior to Dr. Awada's indictment, the DEA arrested one of the clinic's patient recruiters. The recruiter agreed to cooperate and said that he had previously worked for several Detroit area home health agencies that paid several hundred dollars per each patient the recruiter brought in. Because the street price of prescription pain pills is so high, Dr. Awada wanted the recruiter to pay him. The recruiter would bring in the "patients", help them get high dose pain killers, fill them at pharmacies accepting Medicare and then theoretically divvy up the proceeds from the sales on the streets.

Ultimately, the recruiter said he was paying Awada $50,000 per month. By then, the patients were paying cash to see Dr. Awada; the patient recruiter paid cash to the doctor and Medicare was also getting billed. Unfortunately, thousands of dangerous narcotics were also making their way to the streets fueling an unknown number of addictions and crimes.

If Dr. Awada's greed wasn't already bad enough, the DEA says that Awada wasn't satisfied. Apparently he told patients that he was billing Medicare for surgeries or treatments that were never performed. Business became so good that at times the recruiter couldn't fit all the "patients" in his SUV and had to cram people in the trunk area.

After his arrest but prior to his guilty plea, Dr. Awada told the DEA that he ran a "highly ethical" office and was not a pill mill. The DEA and prosecutors didn’t buy it, however. What was the cost of this scam? We may never know for sure but Medicare records say that the clinic billed Medicare over $11 million in a 5 year period. This doesn’t include Medicaid payments, bills from pharmacies where the prescriptions were filled, private insurance payments and the millions in cash apparently pocketed by Dr. Awada directly. We say "millions" because the patient recruiter claims that the doctor bragged about having stashed away $20 million in cash.

According to the DEA, some of the Medicare patients alleging receiving services were dead at the time of those services!

The DEA affidavit represents the government's investigation. Yesterday, Dr. Awada agreed to plead guilty to a single count of unlawful distributing controlled substances and healthcare fraud. How many of the allegations are true? We may never know. By pleading guilty, the remaining counts of the indictment will be dismissed. The plea agreement for those two counts alone, however, sets forth facts showing Dr. Awada dispensed more than 80,000 Roxicodone and Oxycodone pills and billed Medicare $2.3 million.

Under the federal sentencing guidelines, Dr. Awada can expect a sentence between 11 and 14 years. Prosecutors agreed not to seek a sentence more than the midpoint of that range.

Awada was represented by one of the best criminal lawyers in the Midwest. Had he not pleaded guilty and had he been convicted on all or most of the counts, he faced life in prison.

The lessons here for Medicare fraud are many. Awada's scheme was so large and over the top that it quickly attracted law enforcement attention. Drug addicts are notorious for cooperating with law enforcement in order to keep themselves out of prison. Traditional Medicare fraud scams, however, that don't involve pill mills or narcotics often go on for years without being detected.

Most Medicare fraud cases come to light through whistleblowers, concerned healthcare workers withinside information about overbilling or billing for services never performed are how most of these schemes come to light. Under the federal False Claims Act, a whistleblower can receive up to 30% of whatever the government receives from the wrongdoer. Anti-retaliation protections are also available.

Another lesson from this case concerns patient recruiters. Inner city clinics and home health care agencies often use recruiters to sign up and bring in patients. In the typical Medicare fraud scam, therecruiter is paid cash for each patient. Dr. Awada's scheme was a bit different, however. In that case, the recruiter said he paid Awada $50,000 per month presumably in order to get thousands of pain killers.

© Copyright 2022 Mahany LawNational Law Review, Volume V, Number 43
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About this Author

Brian Mahany, Attorney, Mahany Law, Former Law Enforcement

Brian Mahany is an American lawyer and author who leads a Fraud Recovery, False Claims Act (Whistleblower), and Accounting & Legal Malpractice law firm with a national footprint. His journey from Louisiana police officer to lead plaintiff’s counsel and whistleblower attorney in multiple billion dollar cases reads like that of a John Grisham protagonist.

Attorney Brian Mahany typically represents fraud victims, sometimes one or at times groups of 200 or more, who were victimized in complex multi-state or international frauds and also...

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