Corporate Compliance

Houston DME company owners plead guilty to Medicare fraud

Compliance Monitor, June 29, 2011

The owners of two separate Houston-area durable medical equipment (DME) companies admitted to defrauding Medicare, according to the Department of Justice (DOJ).

Kemmie Houston, 43, and Sharon Beal, 47, owners of STK Consultantspleaded guilty for their roles in an $850,000 Medicare fraud scheme, according to a DOJ press release. The company claimed to provide orthotics, power wheelchairs, power wheelchair accessories, and other durable medical equipment (DME) to Medicare beneficiaries. 

According to the DOJ, STK submitted claims to Medicare for DME, including arthritis kits, that was medically unnecessary and/or not provided. The arthritis kit generally contained a number of orthotic devices including braces and related accessories such as heat pads. From August 2005 through August 2010, STK submitted approximately $850,000 in fraudulent claims to Medicare. Beal and Houston each face a maximum sentence of 10 years in prison.

Ekpedeme Obot, 34, owner of Houston-based Praise DME, also pleaded guilty to committing healthcare fraud and making false statements relating to healthcare matters, according to a separate DOJ press release.

Praise DME also purported to provide orthotics and other DME to Medicare beneficiaries.  According to the DOJ, Praise also submitted claims to Medicare for DME, including arthritis kits, that was medically unnecessary or not provided. From March 2007 through August 2008, Obot submitted claims of more than $1.3 million to Medicare and received approximately $945,000.  Obot faces a maximum penalty of 10 years in prison on the healthcare fraud charge and five years in prison on the false statements charge.

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