Missouri Man Gets Prison Time for $7.5M Health Care Fraud

The scheme involved multiple companies and kickbacks to doctors

Oct 11, 2022 at 7:09 am
Between September 2016 and August 2017, AE Wellness submitted $6 million of reimbursement claims to Medicare.
Monica y Garza Monica y Garza.
Between September 2016 and August 2017, AE Wellness submitted $6 million of reimbursement claims to Medicare.

A Missouri business owner was sentenced to 2  1/2 years  in prison on Thursday for his role in a health care scheme that submitted more than $7.5 million of fraudulent claims to Medicare.

Jamie McCoy, 42, of Jackson, Missouri, pleaded guilty in November 2020 to three felonies before being sentenced last week.

McCoy owned AE Wellness, a company that supplied durable medical equipment, including orthotic braces, to patients.

According to his plea agreement, McCoy paid third-party marketing firms to identify patients for AE Wellness. The marketing agencies ran television and internet advertisements for braces at no charge. When someone responded to an ad, an employee at a call center collected that individual's name, address, primary care physician and other medical-related information. This data was then passed on to a telemedicine doctor.

The telemedicine doctor then "signed an order for medical equipment without evaluating or even communicating with the patient in some cases," according to a statement from the U.S. Attorney's office.

Between September 2016 and August 2017, AE Wellness submitted $6 million of reimbursement claims to Medicare.

According to his plea agreement, McCoy "frequently changed companies because of the large humber of patient complaints that AE Wellness received. ... Typically, the patients or the patient representatives complained that they had not requested and did not need or want the orthotic braces."

In July 2017, the company was suspended when the it was caught paying illegal kickbacks to doctors in exchange for their sending orders for braces to AE Wellness.

At this point AE Wellness office manager Brandy McKay and the man who ran its day-to-day operations, Jackson Siples, opened new companies that supplied durable medical equipment.

Those companies were MC Medical, Integrity Medical Supply and Radiance Health Group.

From March 2018 to March 2019, Integrity Medical Supply submitted $6 million in fraudulent reimbursement claims to Medicare and Radiance Health Group submitted almost $1 million. From June 2018 to March 2019, MC Medical sent phony claims worth $1.8 million to Medicare. The companies also defrauded Tricare, which reimburses military members, veterans and their families for medical expenses.

Prior to being sentenced last week, McCoy pleaded guilty to three charges: health care fraud, making false statements related to health care matters and paying illegal kickbacks for referrals. Even if the medical expenses had been real, Medicare, Medicaid and Tricare do not pay for items that were sold using kickbacks.

“Submitting false claims for medically unnecessary equipment diverts funding from the necessary services required to support beneficiaries of federal health care programs,” Curt L. Muller, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General, said in a statement.

In January, Brandy McKay, who went on to manage several other businesses running the same scheme, received a three-year prison sentenced and was also ordered to repay $7.5 million.

Siples has pleaded guilty but has not yet been sentenced.

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