Healthcare Shell Game

Stethoscope on 100 dollar bills symbolizing financial surveillance

A Roanoke, Virginia, medical practice dreamed up a lucrative scam to charge the government for doses of an expensive medication that it didn’t administer. Over about nine and a half years, Allergy and Asthma Associates (AAA) billed Medicare $627,540 for Xolair that it didn’t give to patients.

The medication is sold in single-use vials and, in many cases, patients require only a partial vial of the drug. Medical providers are supposed to discard any remaining medication not used from each vial. However, AAA used “leftover” Xolair for other patients, and billed Medicare and Medicaid as if it was using new, entire single-use vials. (Uh, waste not, want not – at least for the greedy doctors.)

Records indicate that this wasn’t the only fraud the company perpetrated. AAA also received 129 vials of Xolair from Medicaid but has no documentation to indicate it was used for any Medicaid patients. That grift cost the Medicaid program nearly $89K more. As the Department of Health and Human Services Special Agent in Charge noted, “Every Medicare or Medicaid dollar paid wrongfully is money no longer available for crucially needed health services.” (So, these well-paid doctors were effectively stealing care from Americans who are often forced to choose between purchasing food or getting expensive medical treatment.)

In June 2020, AAA pleaded guilty to one count of healthcare fraud. In March 2021, a $2.1million civil resolution was finalized, to settle claims that the company violated the false claims act. Nearly $2M of that will be paid to the U.S. Government, with close to $155K more to the Commonwealth of Virginia. (Hopefully, the penalty is a permanent cure for the fraud ailing these schemers.) 

Today’s Fraud of the Day comes from a press release from the U.S. Attorney’s Office for the Western District of Virginia, ”Allergy and Asthma Associates in Roanoke Pleads Guilty to Criminal Charges; Enters into Civil Resolution Over Health Care Fraud Allegations,” dated March 2, 2021.

ROANOKE, Va. – Acting United States Attorney Daniel P. Bubar and Virginia Attorney General Mark G. Herring announced today the finalization of a $2.1 million civil resolution with Allergy and Asthma Associates Inc. [AAA], a Roanoke-based, family-owned medical practice that billed Medicare and Virginia Medicaid more than $600,000 for expensive asthma treatments in did not purchase or improperly administered to patients. In June 2020, AAA pleaded guilty in U.S. District Court in Roanoke to one count of criminal health care fraud.

“When a medical practice fraudulently bills our Medicare and Medicaid programs, it diverts funds from the most vulnerable in our communities and must be held accountable,” said Acting U.S. Attorney Bubar.  “Today’s civil resolution coupled with AAA’s criminal conviction in June marks the end of a lengthy investigation and demonstrates that we will work closely with our federal and state partners to hold providers responsible for healthcare fraud.”


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Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.