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, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.