Former employees say Med-Care defrauded government


Former employees of Med-Care Diabetic & Medical Supplies, a Boca Raton-based company raided by federal agents Wednesday, describe the type of high pressure sales job one might find at hundreds of American companies. And that’s the problem.

Cold-calling, arm-twisting tactics are illegal in the world of Medicare billing. Providers of medical supplies that bill Medicare are prohibited from operating like a sales job in which telemarketers solicit customers and pressure them to accept more and more medical equipment– with the bill passed onto the federal government.

A lawsuit filed in U.S. District Court for the Southern District of Florida accuses Med-Care of defrauding the government. It said the company cold-called seniors and other consumers, pushing them to accept medical equipment they may not have wanted or needed and sometimes sent the equipment without obtaining a doctor’s prescription, all in violation of Medicare billing rules.

The process is supposed to be a transparent one: Medicare beneficiaries can request medical equipment they want and that their doctors say they need. The durable medical equipment company gets a prescription from the doctor, bills Medicare and ships the order.

A medical equipment supplier is only allowed to initiate a call to a client under very specific conditions, such as to resupply a product the beneficiary has previously requested.

But former employees who allege that Med-Care engaged in fraud against the government say the company played by its own set of rules.

The complaint alleges telemarketers were guided by Danny Porush, “who is an expert in running high-pressure telemarketing operations.”

Porush was convicted of insider trading, perjury, conspiracy and money laundering and ordered to pay $200 million in restitution in connection with his role as president of a Long Island brokerage firm in the late 1990’s.

The company’s wild ways were the inspiration for the movie “Wolf of Wall Street” starring Leonardo DiCaprio. A character based on Porush was played by Jonah Hill.

In an interview with Mother Jones magazine, Porush took issue with the accuracy of the antics portrayed in the movie.

The lawsuit against Med-Care was filed by Tiffany Bumbury, who worked for a company affiliated with Med-Care in New York, and two former Boca Raton employees Stanley Bernstein and Jamie Camuccio. This type of lawsuit, known as qui tam, allows accusers to be paid a portion of money recovered if they are able to prove their case.

Med-Care filed nearly 661,000 claims and received about $84.5 million in Medicare payments between 2009 and 2012, according to a Senate committee hearing that looked into the company.

Attorney Stephen A. Best of Brown Rudnick, who represents Med-Care, said Friday of the complaint:

“There’s nothing in the allegations that causes my client or anyone to worry. If this matter ever gets to court, we look forward to addressing it. I highly doubt it will.”

Also Friday, Med-Care attorneys sought to disqualify the legal team representing the former Med-Care employees who have accused the company of fraud. In the course of reviewing paperwork related to the lawsuit, Med-Care said it discovered last week that an attorney now representing the former employees once advised Med-Care. The attorney, Parker Eastin, directly worked on behalf of Med-Care in September 2010 and advised others who worked on the case for one more month, in October 2010, according to the court filing.

“Literally two months and one day after Eastin worked on the Med-Care telemarketing and regulatory matters at Broad and Cassel, (Eastin’s new) firm sued the defendants in this case for the same issues that Eastin analyzed,” Med-Care attorneys said Friday in the filing.

Med-Care is now seeking to have Eastin and the rest of his team disqualified. Med-Care said it is also asking the Florida Bar to investigate.

“This case presents a shocking and inexcusable breach of fiduciary and professional duties by Med-Care’s former counsel, which has caused irreparable economic and reputational harm to the defendants,” Med-Care wrote in its filing. “This is not just an unfortunate circumstance. It is a complete travesty.”

Former Med-Care employees allege in their suit that they were trained to cold-call customers, but instead claim they were replying to the customer’s request for information or acting on a doctor’s order. They say they were taught to garble the name of Med-Care, to make it sound like Med-i-care, implying the government agency was initiating the call.

The former employees were given scripts or trained to follow the lead of more-seasoned telemarketers who claimed to be working on behalf of a Christian company. Sometimes sales staff would claim to be a volunteer who had diabetic children and was offering free diabetic supplies, according to the lawsuit.

Bumbury who was a telemarketer in the New York call center affiliated with Med-Care from August to November 2010, said she was told to “say whatever we needed to say,” to obtain Medicare billing information and secure a sale, according to the lawsuit.

Bumbury said she got the job after answering a Craigslist ad offering $12 an hour base pay and the chance to “easily double that with commissions,” the lawsuit said. Employees were paid commission for each unit of medical equipment they sold, the suit alleges.

At Bumbury’s orientation, Jordan Shamah, a sort of manager who worked in New York before joining the Boca Raton office, began interviewing the recruits, the complaint alleges.

He asked: “On a scale from 1-10, how motivated are you by money?”; “How comfortable are you with making lots of cold calls a day?”; “Do you get discouraged if people curse you out or hang up the phone on you?” The prospective employees were asked to stay or leave depending on their answers, the lawsuit said.

Shamah also monitored the calls of telemarketers, according to the lawsuit.

He would urge: “find out if his wife, kids, grandkids, neighbors, mistress or friends at church have sleep apnea, diabetes, COPD, etc. If they have none of the above just send them an aqua massage therapy kit, anyone can use one,” the complaint said. “Guys, you can literally make 20 sales on one call.”

The former Med-Care employees describe sales meetings in which their bosses stood on desks and gave speeches, designed to inspire them to make more deals. In one such motivational speech, a boss said he’d made “millions” making cold calls, the complaint says.

Employees who did not sell enough learned they had no place at the company, said one former employee who is not part of the lawsuit and asked not to be identified. Each week an office manager would walk among the sales staff and tap someone on the shoulder, he said. The tap was a sign to pack up and leave.

“It is the most dog-eat-dog sales job I’ve ever had,” he said last week. “I’ve never seen (a situation in which) you’re working and then, minutes later, the office manager walks up and just fires you.”

Med-Care bought leads from third parties in violation of the Anti-Kickback Statute, the lawsuit says. Seniors would click an offer for a Wal-Mart gift card or a chance for an iPad and enter their personal information. That information was funneled to Med-Care, the suit says.

Stanley Bernstein, who worked at Med-Care from May 2010 to April 2014, said the promotions elicited contact information, including the person’s name, date of birth, and phone number.

Bernstein received complaints from Medicare beneficiaries that they had not received their promotional gift and that they were being called even though they’d checked on the form that they did not want to be contacted, according to the suit.

The former employees said that, for a time, Med-Care was sending medical equipment without getting doctor authorization, according to the complaint. But after a Medicare audit was initiated, the company sent thousands of “blast faxes” to doctors and hired a company to try to secure doctors’ prescriptions, the lawsuit alleges.

As part of its case against the company, the former employees or their attorneys dove into a trash bin behind the Med-Care building in Boca Raton. They found company emails, patient records and returned medical equipment that led them to more than 15 Med-Care clients, the complaint says. Those clients complained of receiving unsolicited calls as often as five times a week. One man said the company sent him a back brace although he had no back problems. Another client said the company sent him so many testing supplies he felt like Med-Care was “shoving it” at him.

K.W, of Cedar Rapids, Iowa, said she received unsolicited calls from Med-Care, promising her free diabetic testing supplies. She accepted at first, but received numerous unsolicited calls offering her other supplies. She said she didn’t need a breathing machine. But two were sent to her along with 675 doses of albuterol, more than she could possibly use before it expired, the complaint said.

K.W. called Med-Care to complain that she didn’t need the items, but was told to just keep them. K.W. sent the equipment back and demanded to be repaid for her shipping expenses. The equipment was found in the trash along with a customer satisfaction questionnaire, according to the complaint.

On it, the complaint alleges, K.W. wrote: “It will cost me an arm and a leg to return these because they are so heavy. SO, here’s my deal – you reimburse me my postage OR I will turn you in for Medicare fraud. I do not need these and I told you that. You sent them anyway, so that is wasting of Medicare Money which costs us all. I will give you until May 1st to get a check to me or I will turn you in. If you think I am joking, you better think again.”


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