In one of the largest recent Medicare fraud cases, Peter Roussonicolos, a Florida durable medical equipment (DME) company owner, was sentenced to 12 years in federal prison for orchestrating a scheme that defrauded Medicare of more than $61 million.
Here’s how the scheme worked:
- Hidden Ownership: Roussonicolos used straw owners to disguise his true role in several DME companies, evading disclosure requirements and regulatory oversight.
- Illegal Kickbacks: He arranged payments to marketers and telemedicine providers in exchange for patient referrals, blatantly violating federal Anti-Kickback Statute provisions.
- False Documentation: Physicians and other medical providers were incentivized to generate fraudulent prescriptions and medical necessity documentation, creating a paper trail that made the claims appear legitimate.
- Excessive Billing: Using this structure, the companies submitted tens of millions in false claims to Medicare for equipment patients didn’t need—or never even received.
The Department of Justice and HHS-OIG highlighted this case as part of their ongoing crackdown on healthcare fraud, waste, and abuse, emphasizing the importance of transparency, compliance, and strong internal controls.
Compliance Takeaways:
- Ownership transparency matters. Hidden or straw ownership arrangements are a red flag that regulators actively investigate.
- Kickback-free operations are critical. Even “creative marketing arrangements” can be viewed as inducements if tied to patient referrals
- Medical necessity must be genuine. Documentation is not just paperwork—it’s evidence, and falsification leads directly to liability.
- Internal oversight saves businesses. Routine compliance audits, robust training, and third-party reviews can prevent practices from drifting into legally risky territory.
The Roussonicolos case is a cautionary tale: shortcuts and “workarounds” to grow revenue may look profitable in the short term, but in regulated industries like healthcare, they often end in criminal convictions, reputational collapse, and financial ruin.
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