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Getting old is definitely not for sissies. Some old age issues include aches and pains, memory loss, and mobility issues, not to mention incontinence (which impacts about 13 million Americans). Depending on needs and eligibility, Medicaid in the State of Illinois pays for a range of incontinence supplies if a doctor provides a prescription. Once approved, incontinence products are shipped directly to the beneficiary’s door – in discreet packaging, of course. (You certainly don’t want to advertise your personal health issues with a box of adult diapers sitting on the front porch.) Today’s fraud article profiles a Medicaid fraud scheme run by a former Springfield, Illinois business owner who tried to discreetly steal more than $2.3 million through illegal claims.

The man at the center of the Medicaid fraud scheme operated his incontinence product business from a residence located in Springfield. He sold products such as diapers and pull-ups to Medicaid beneficiaries, including many special needs adults and kids. Over approximately four years, he caused false claims to be submitted to the Illinois Department of Healthcare and Family Services for delivery of incontinence products sold by his company.

The false claims submitted by the Springfield man indicated that Medicaid beneficiaries had received their incontinence products even though they had not received anything at all, or a different quantity than the amount claimed on the bill. (Consequently, in response to the claims submitted, Medicaid paid the man’s company $2.3 million. That’s a lot of diapers.)

It appears that the Springfield business owner went on a spending spree and used the Medicaid-designated funds for himself. He used the government money to buy clothes, food and fuel. He also made a few mortgage payments, entertained himself and travelled a bit. Apparently, he also shared the newfound wealth with a family member. (So much for being discreet. I’m sure the paper trail of expenditures did not help his defense.) About a year after his illegal operation was halted, his business was involuntarily dissolved. (In other words, his government slush fund dried up.)

The former Springfield, Illinois man pleaded guilty to Medicaid fraud for submitting fraudulent bills for incontinence products. The 53-year-old fraudster, who is most recently from Augusta, Missouri, was ordered to serve two years in federal prison. (He must also pay restitution of $582,844 to make up for the overflow of Medicaid funds.) To make sure that this man’s crime serves as a reminder to others who are considering the same crime, the judge also included three years of supervised release, beginning with six months of home confinement.  (Ironically, since he cannot leave his home, like his customers, he’ll be receiving a few discreet deliveries of his own. No doubt, he will not be receiving anything else from Medicaid.)

Today’s “Fraud of the Day” is based on an article entitled, “Owner of former Springfield medical supply business sentenced for fraud,” posted on FoxIllinois.com on March 29, 2019.  

SPRINGFIELD, Ill. (WICS/WRSP) — A former Springfield, Ill. man was sentenced Friday for defrauding Illinois’ Medicaid program.

Kevin W. Schaul’s business supplied incontinence products to Medicaid recipients.

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Larry Benson
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.