A Scheme Too Good to Be True

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High Angle View Of A Person With Fractured Hand Filling Health Insurance Form

A Lake Charles, La., surgeon used his professional status to defraud the government and private insurance companies. Robert Dale Bernauer, 74, has pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees’ compensation, and illegal renumerations. (Wow, that’s a long list.) In simple terms, he overbilled for unnecessary medications provided to his workers’ compensation patients and now he owes a lot of money.

Bernauer dispensed pain creams and patches to his workers’ compensation patients after being recruited by an Arkansas company to do so. The company offered Bernauer 50 percent of profits made, and Bernauer accepted. The orthopedic surgeon fraudulently over-billed the U.S. government and private insurance companies between 2011 and 2017.

The Arkansas company marked up their bills to insurers by between 1,500 and 2,000 percent, or 15 to 20 times what the medications actually cost. The company handled all the necessary paperwork and submitted the claims to the U.S. Department of Labor and the Office of Workers’ Compensation Programs. (Bernauer only had to cover the dirty work.)

The surgeon admitted that he nor his co-conspirators had a license to dispense the medications being given to patients. The profit-splitting arrangement made between Bernauer and the Arkansas company also violated federal and Louisiana laws. Though Bernauer’s defense was that he knew the agreement must have been “too good to be true”. (Well, hindsight is 20-20, right?)

Bernaurer’s plea agreement states that though his actions are unexcused, he needed the money to help his wife’s illness. (Was that true, or was he playing on the heartstrings of his prosecutors?)  

During his plea hearing, Bernauer waived the indictment by a grand jury and pleaded guilty to the charges against him. (Smart move.) He immediately agreed to pay $664,176.30 in restitution to the Department of Labor within 30 days. He also agreed to pay $361,096.70 to the court clerk’s office to help repay other insurers and will work with his co-conspirators to pay an additional $1,025,273 in restitution. Bernaurer’s plea agreement may require him to serve up to five years in prison.

Today’s Fraud of the Day comes from a Department of Justice press release, “Louisiana Doctor Pleads Guilty to Workers’ Comp Fraud Conspiracy,” dated July 30, 2021.

FAYETTEVILLE, Ark.—A Lake Charles, La., physician pleaded guilty today to one count of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees’ compensation, and illegal remunerations (taking kickbacks), in connection with a scheme to defraud the U.S. government and private insurance companies by over-billing for unnecessary medications provided to workers’ compensation patients.

U.S. District Judge Timothy L. Brooks presided over the plea hearing, in which Robert Dale Bernauer, Sr., 74, waived indictment by a grand jury and pleaded guilty to a criminal information charging him with conspiracy to violate five different federal statutes. According to court documents, Bernauer, an orthopedic surgeon and clinician who practiced in Louisiana, made more than $1,000,000 off of the scheme, which ran from 2011 until 2017 and defrauded both federal and private workers’ compensation insurers.

 

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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.