In short
- The owner and co-conspirators paid over a million dollars in illegal kickbacks and submitted more than $30 million in false claims.
- Loftis was ordered to pay over $8 million in restitution and to forfeit over $560,000.
What happened
An Oklahoma chiropractor and business owner, Mark Loftis, was sentenced to 14 years in prison for orchestrating a scheme that attempted to defraud Medicare, TRICARE, and CHAMPVA out of over $30 million. Loftis and his co-conspirators concealed ownership, paid illegal kickbacks, and submitted fraudulent claims for durable medical equipment that beneficiaries did not want or need.
Loftis was convicted after a 12-day jury trial and ordered to pay over $8 million in restitution and forfeit over $560,000. The scheme involved purchasing sham doctors’ orders, billing for multiple orthotic braces per beneficiary, and using unenrolled entities to submit claims. The case was investigated by HHS-OIG, FBI, DCIS, and VA-OIG.
Loftis and his co-conspirators submitted over $30 million in false and fraudulent claims and were paid over $8 million. Loftis and his co-conspirators frequently billed for multiple orthotic braces at a time, including in one example eight braces for a single beneficiary.
In numbers
- 14 years in prison sentenced
- $30 million fraudulent claims submitted
- $8 million restitution ordered
What compliance teams should check
- Review claims submitted by Back Pain Home Supplies LLC dba EZ Medical Supply for patterns of multiple orthotic braces per beneficiary.
- Check for undisclosed ownership and management structures in DME companies, especially those linked to unenrolled entities billing through Medicare.
- Scrutinize payments to shell marketing companies and telemedicine providers for potential illegal kickbacks as described in the DOJ case.
Why it matters
This case highlights the importance of robust controls to detect and prevent fraudulent billing, undisclosed ownership, and illegal kickbacks in federal health care programs. Compliance officers must be vigilant for schemes involving sham doctors’ orders, excessive billing for medical equipment, and the use of shell companies to mask illicit payments. The DOJ’s decisive action and significant sentencing underscore the risks and consequences for entities that compromise the integrity of Medicare, TRICARE, and CHAMPVA, and the need for ongoing vigilance to protect taxpayer dollars and vulnerable beneficiaries.
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