Patient Recruiter Pleads Guilty in Health Care Fraud Scheme

WASHINGTON – A Baton Rouge, La.-area resident pleaded guilty today for her role in a Medicare fraud scheme involving fraudulent claims for medically unnecessary health care equipment, announced the Department of Justice, the FBI, the Department of Health and Human Services (HHS) and the Louisiana State Attorney General’s Office. 

Karen Rayburn, 47, pleaded guilty before U.S. District Judge James J. Brady of the Middle District of Louisiana to one count of conspiracy to commit health care fraud. 

Rayburn admitted that she worked as a recruiter for Healthcare 1 LLC and Medical 1 Patient Services LLC, Louisiana-based companies that fraudulently billed medical equipment to the Medicare program from 2004 to 2009. She and other recruiters were hired to obtain prescriptions for medical equipment such as leg braces, arm braces, power wheel chairs and wheel chair accessories. Rayburn obtained information from Medicare beneficiaries and approached their physicians to request prescriptions for medical equipment. Rayburn admitted that when patients’ physicians were unwilling to provide medically unnecessary prescriptions, she and other recruiters asked unrelated physicians to write prescriptions based on cursory examinations of the patients. Another technique they used was to generate photocopied forms with reproduced physicians’ signatures. These prescriptions were then used to submit fraudulent claims to the Medicare program.

From 2004 to 2009, Medicare was billed $6.53 million for the beneficiaries that Rayburn provided as part of this fraudulent scheme.

Rayburn faces a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not yet been set.

Today’s plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Donald J. Cazayoux Jr. of the Middle District of Louisiana; Mike Fields, Special Agent-in-Charge of Dallas Region for the HHS Office of the Inspector General (HHS-OIG); David Welker, Special Agent-in-Charge of the FBI’s New Orleans division; and Louisiana State Attorney General James Buddy Caldwell.

The case is being prosecuted by Trial Attorneys David Maria and Abigail Taylor and Assistant Chief William Pericak of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, and the Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office (MFCU), and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana.

Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,160 defendants that collectively have billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.