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The Real Cost Behind a $50 Gift Card

The Real Cost Behind a $50 Gift Card

Medicare enrollment form and glasses
Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

It’s not always easy to get patients to comply in assisting with medical fraud. It took some creative thinking by Doctor Sekhar Rao to entice patients in his Medicare scheme, but gift cards seemed to do the trick in aiding him in filing roughly $36 million in fraudulent health care claims.

Dr. Sekhar Rao, 51, was the medical director of the ADAR Group, LLC but reportedly never visited ADAR Group. Fraudsters don’t need to go to the office! Without ever seeing the patients, Rao fraudulently authorized toxicology and genetic testing, including cancer genetic testing, for Medicare funded Tricare beneficiaries. Rao authorized the testing without speaking to or treating patients, and without incorporating the test results into ongoing treatment. In some cases, the patients did not know what they were being tested for. But many patients were enticed to provide urine or saliva specimens in exchange for $50 gift cards to Walmart. Easy money for spitting in a cup. But was it worth it?

To ensure Tricare would pay out, Rao placed false diagnosis codes on all the claims, such as “malignant neoplasm of lip” and “alcohol abuse, uncomplicated” for beneficiaries who had neither a history of cancer nor alcoholism. Patient misidentification, such as this, can lead to serious repercussions on future medical diagnoses when based on inaccurate medical data, or cause future medical claims for real issues to be rejected by insurance companies. So maybe it wasn’t worth taking a $50 Walmart gift card.

Rao’s scheme went from May 2014 to June 2016. He was paid “kickbacks” of $6,000 to $8,000 per month to order the unnecessary tests. His scheme was eventually discovered and on August 30, 2022 he was found guilty of health care fraud. He is scheduled to be sentenced on March 27, 2023.

Great job by Health and Human Services who investigated the case.

Today’s Fraud of the Day is based on an article “Texas Doctor Convicted in $36 Million Tricare Fraud Scheme” published by Military News on September 1, 2022

A doctor in Texas was convicted this week of defrauding Tricare in a scheme that involved luring patients into taking unnecessary medical tests in exchange for gift cards.

Sekhar Rao, 51, who was the medical director of an outpatient toxicology testing facility called ADAR Group LLC, was convicted by a federal jury of two counts of health care fraud, the Justice Department said in a news release Tuesday.

Rao and others charged in the scheme were accused of filing roughly $36 million in false and fraudulent claims to Tricare between May 2014 and June 2016, according to the indictment against them.

He was found not guilty on a third charge of conspiracy to commit health care fraud, according to court documents.

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