Missouri Laboratory Owners Agree to Pay $1.9 Million and Relinquish $7 Million in Escrow in Settlement of Civil Fraud Claims
CAPE GIRARDEAU – U.S. District Judge Stephen N. Limbaugh on Thursday sentenced a business owner from Jackson, Missouri to 30 months in prison for health care fraud and ordered him to repay $7.5 million.
Jamie McCoy, 42, pleaded guilty on Nov. 23, 2020 to three felony counts: health care fraud, making false statements related to health care matters and offering and paying illegal kickbacks for referrals. He admitted owning or operating companies that supplied orthotic braces and other durable medical equipment (DME): AE Wellness LLC, Summit Medical Supply, Patriot Medical Supply and DME Device Co.
McCoy contracted with marketing firms who placed ads on television and online that offered orthotic braces at no cost. The companies sent patient information to a telemedicine doctor who signed an order for medical equipment without evaluating or even communicating with the patient in some cases, McCoy’s plea agreement says. Those leads, consisting of the patient information and the medical equipment order, were then sold to DME companies.
McCoy admitted paying 70% to 80% of his profits to one person who supplied leads to AE Wellness. Another received $35-40 for leads without a doctor’s order and $280-$300 for a “full lead.”
From September 2016 to August 2017, AE Wellness submitted $6 million in reimbursement claims to Medicare for DME and $67,955 to Tricare. Patriot Medical Supplies billed Tricare $23,951. McCoy admitted knowing Medicare, Medcaid and Tricare, which reimburses for health care services provided to current and former members of the military and their families, would not pay for items obtained by paying illegal kickbacks.
After AE Wellness was suspended in 2017 for paying illegal kickbacks, McCoy, AE’s office manager Brandy McKay and Jackson Preston Siples III, who ran day-to-day operations at AE, opened new DME companies. They concealed McCoy’s role, and continued to pay kickbacks for referrals and leads, McCoy’s plea agreement says.
From June 5, 2018 to March 21, 2019, McCoy and McKay submitted $1.8 million in fraudulent reimbursement claims to Medicare and $15,540 to Tricare on behalf of a company known as MC Medical. From March 8, 2018 to March 13, 2019, Siples submitted $6 million in fraudulent reimbursement claims to Medicare and $145,614 to Tricare on behalf of a company known as Integrity Medical Supply. Siples submitted $922,562 in false claims to Medicare from March 5, 2019 to Match 27, 2019 on behalf of Radiance Health Group.
McKay went on to manage a series of companies that continued the scheme.
“Submitting false claims for medically unnecessary equipment diverts funding from the necessary services required to support beneficiaries of federal health care programs,” stated Curt L. Muller, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General. “OIG will continue to work with our law enforcement partners to identify and hold accountable individuals who choose to waste vital taxpayer dollars by participating in health care fraud schemes.”
McKay was sentenced Jan. 18, 2022 to three years in prison and ordered to repay $7.5 million. Siples pleaded guilty in May to the same charges as McCoy and is awaiting sentencing.
The Department of Health and Human Services Office of Inspector General, the FBI, the Defense Criminal Investigation Service and the Missouri Medicaid Fraud Control Unit investigated this case. Assistant U.S. Attorneys Dorothy McMurtry and Derek Wiseman are prosecuting the case.