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Medical Equipment Company Owner Pleads Guilty to Fraud Scheme Involving Nutritional Supplies and "Arthritis Kits"
Date:11/2/2009

WASHINGTON, Nov. 2 /PRNewswire-USNewswire/ -- The owner and operator of a Houston-area durable medical equipment (DME) company today pleaded guilty to defrauding the Medicare program, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney Tim Johnson of the Southern District of Texas and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS).

Noel Wayne Jhagroo, 47, pleaded guilty to conspiracy to commit health care fraud before U.S. District Judge Vanessa Gilmore in the U.S. District Court in Houston. In his plea, Jhagroo admitted that he owned and operated a DME company called Trucare Medical Equipment Services (Trucare), and that he billed Medicare for equipment and supplies that were in most instances medically unnecessary, or were never actually provided to Medicare beneficiaries. Sentencing has been scheduled for Feb. 23, 2010.

Jhagroo admitted that beginning in April 2004 and continuing through July 2009, he conspired with others to submit approximately $962,000 in fraudulent claims to Medicare. Specifically, Jhagroo admitted that he billed Medicare for enteral nutrition products that, according to Medicare regulations, were only to be used for patients who had feeding tubes inserted or surgically implanted in their noses, mouths or stomachs. Only one of the numerous Medicare beneficiaries for whom Jhagroo submitted bills to Medicare for such nutrition products had such a tube. Jhagroo also admitted to actually delivering only a fraction of the products for which he billed Medicare.

In addition, Jhagroo admitted to billing Medicare for medically unnecessary orthotic devices, many of which were components of so-called Arthritis Kits, or "Artho Kits." These kits, which included braces for both sides of the body as well as related accessories such as heating pads, were purportedly to be used for the treatment of arthritis-related conditions, even though the defendant admitted that he knew the kits were not medically appropriate for such conditions.

Jhagroo admitted to billing Medicare approximately $4,000 per kit, and to providing beneficiaries with inferior kits consisting of less expensive, lightweight neoprene sleeves, which were often of an improper size for the beneficiary.

In his plea, Jhagroo admitted that in August of 2004, he and a codefendant agreed to a kickback arrangement whereby he would pay the codefendant in exchange for the referral of Medicare beneficiaries for whom he would supply DME, and then bill Medicare for the equipment through Trucare. Jhagroo admitted that the codefendant would recruit Medicare beneficiaries for the purpose of filing claims with Medicare for DME that was medically unnecessary or was not provided.

The case is being prosecuted by Trial Attorney Katherine Houston of the Criminal Division's Fraud Section, and was investigated by the FBI and HHS, Office of the Inspector General.

The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division's Fraud Section and U.S. Attorney Tim Johnson of the Southern District of Texas.

Since the inception of Strike Force operations in March 2007 - Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three) and Houston (Phase Four) - the Strike Force has obtained indictments of 331 individuals and organizations that collectively have billed the Medicare program for more than $720 million. In addition, HHS's Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov

Each of the Strike Force teams across the separate phases is led by a federal prosecutor from the Criminal Division's Fraud Section or the U.S. Attorney's Office. Each team has an agent from the FBI and HHS-OIG.

SOURCE U.S. Department of Justice


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SOURCE U.S. Department of Justice
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