Thursday, September 29, 2011

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Business Owner Convicted in State and Federal Health Care Fraud Investigation

The U.S. Attorney for the Southern District of Texas issued the following news release on Sept. 28, 2011:

DME Owner Sentenced to Prison for Defrauding Medicare of Millions in Wake of Hurricanes Katrine and Rita

HOUSTON - A former owner of a durable medical equipment company (DME) was sentenced today to more than six years in federal prison for engaging in a conspiracy to defraud Medicare of more than $5 million and wire fraud, United States Attorney Josť Angel Moreno announced today.

Patrick Ita, 55, the owner of Masspoint Medical Equipment & Supplies and of PUITA Research &Procurement Inc., a medical billing company, was sentenced to a total of 78 months in prison without parole to be followed by a three-year-term of supervised release today by U.S. District Judge Sim Lake for the conspiracy and wire fraud convictions. The court also ordered Ita to pay restitution to Medicare and Medicaid in the total amount of $1,582,946.44. Masspoint is no longer in operation.

Ita pleaded guilty to conspiring to defraud Medicare on April 15, 2011. During that proceeding he admitted to having participated in a 13-month conspiracy to defraud Medicare by billing Medicare using a specific code created by Medicare to expedite the approval and payment of claims for DME lost or destroyed by Hurricanes Katrina and Rita. Ita's fraudulent claims involved the alleged replacement of power wheelchairs by Masspoint. Ita used the CR modifier for power wheelchair claims: 1) where the beneficiary did not have a power wheelchair before the hurricanes; 2) where the power wheelchair owned by the beneficiary did not sustain any hurricane-related damage; 3) where Ita never delivered a power wheelchair to the beneficiary; and 4) where Ita delivered a scooter instead of a power wheelchair to the beneficiary.

Ita also admitted purchasing beneficiaries' Medicare information from the owner of a former DME company and using that list to bill Medicare for a new power wheelchair for every beneficiary without determining whether the beneficiary had lost a wheelchair in the hurricane. Ita also paid marketers to solicit additional Medicare beneficiaries for power wheelchairs and used the CR modifier for every power wheelchair sold to a beneficiary by the marketers.

Ita also pleaded guilty to wire fraud admitting he filed fraudulent Medicare claims with Palmetto GBA, a Medicare contractor located in Columbia, S.C. All Medicare payments made based on the fraudulent claims were sent by electronic funds transfer from Columbia to Ita’s bank account in Houston. Ita billed Medicare in excess of $5.4 million and was paid at least $1.6 million as a result of his scheme.

Ita, who has been in custody without bond since his January 2011 arrest, will remain in the custody of the U.S. Marshals Service pending transfer to a Bureau of Prisons facility to be designated in the near future.

The criminal charges are the result of a joint investigation conducted by agents of the FBI; the U.S. Department of Health and Human Services-Office of Inspector General, the Railroad Retirement Board-Office of Inspector General and the Medicaid Fraud Control Unit of the Texas Attorney General’s Office. This case was prosecuted by Assistant United States Attorney Al Balboni.