A former executive with an unnamed Rogers medical supply and billing company pleaded guilty Tuesday in a federal fraud and kickback scheme where insurers were overbilled for unnecessary medications provided to workers’ compensation patients.
Amanda Dawn Rains, 39, waived indictment by a grand jury and pleaded guilty to one count each of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees’ compensation, and illegal remunerations (paying kickbacks), the U.S. Attorney’s Office for the Western District of Arkansas announced in a news release.
She has agreed to pay restitution to the Department of Labor and to other insurers, in amounts to be determined. The total alleged losses include but are not limited to more than $3.9 million paid by the Department of Labor and almost $2 million paid by private insurers for medications that one of the many physicians involved in the scheme dispensed.
Rains also faces a maximum of five years in prison. She will be sentenced at a later date.
The scheme ran from 2011-2017, according to the release. The U.S. Attorney's Office alleges that beginning in 2013, the company Rains worked for as billing director recruited physicians to dispense pain creams and patches to their workers’ compensation patients by offering them a split of the profits collected from successfully billing insurers, typically 50%.
One physician, Robert Dale Bernauer Sr. of Lake Charles, Louisiana, pleaded guilty July 30 to his role in the scheme.
Authorities allege that the company supplied pain creams and patches to the physicians it contracted with, then acted as their billing agent, submitting fraudulent claims to the U.S. Department of Labor and Office of Workers’ Compensation Programs. Those programs cover all federal employees and private insurers.
The company is accused of billing insurers at markups of anywhere from 15 to 20 times what the medications actually cost and of paying the physicians kickbacks on the amounts collected.
Rains, according to the release, electronically submitted the fraudulent claims; maintained a “do not dispense” list of insurers that refused to pay claims; advised doctors and clinics on how to respond to insurers that questioned charges; and shipped medications to Bernauer and bill insurers for his prescriptions despite knowing he did not have the required Louisiana license to dispense medications.
She also allegedly prepared presentations to recruit doctors, presentations that falsely stated the business arrangements didn’t violate anti-kickback laws.