When It Rains, It Pours

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

In Fayetteville, Ark., Amanda Dawn Rains, 39, pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees’ compensation, and illegal remunerations (paying kickbacks). (When fraud rains, it pours.)

The former billing director for a Rogers medical supply and billing company, joined in a fraud scheme that defrauded both federal and private workers’ compensation insurers between 2011 and 2017. The basic premise of the workers’ compensation fraud scheme involved recruiting physicians to dispense pain creams and patches to their patients, who qualified for workers’ compensation benefits. (The doctors got a split of the profits collected from successfully billing insurers.)

Once the physician contracts were signed, creams and patches were supplied by the company. The Rogers company acted as billing agents for physicians, handling the insurance paperwork and the submission of fraudulent claims to the U.S. Department of Labor’s (DOL) Office of Workers’ Compensation Program.

The firm submitted all the fraudulent claims, marking up the bills at a rate of 15 to 20 times what the medications cost. The physicians that assisted with the scheme typically received 50% of the profits collected. (It was a terrible idea to join in on the scheme, let alone split the take.) One of the physicians recruited was Robert Dale Bernauer, Sr., who ran a clinic in Lake Charles, La.

Bernauer pleaded guilty to his contribution in the same conspiracy in July 2021.

Rains’ specific role in the conspiracy included managing the billing system for the Rogers corporation; electronically submitting fraudulent claims to the DOL; maintaining a list of insurers that would not pay the claims; advising doctors and clinics how to respond to questions they received from insurance companies; preparing recruitment presentations that falsely claimed their operations did not violate anti-kickback laws; and, shipping medication to Bernauer with the knowledge that he did not have the required license to dispense medications in Louisiana. (I wonder if Rains had an answer prepared for any questions regarding the penalty for committing workers’ compensation fraud.)

In Rains plea agreement, she promised to pay restitution to the DOL and to other insurers victimized by the conspiracy. She caused total losses of more than $3.9 million to the DOL, while the amount paid by private insurers is still to be determined. Rains faces a maximum of five years in prison. (Five years doesn’t sound like nearly enough time to pay for her crimes.)

According to court documents, Bernauer has already paid restitution of $1,025,273 to the DOL for more than $2 million in payments made for medications he approved. (While he’s made some progress in making things right, he still has a long way to go.) 

Today’s Fraud of the Day comes from an article, “Rogers woman pleads guilty in $4 million kickback scheme,” dated September 7, 2021.

FAYETTEVILLE, Ark.—A former executive with a Rogers medical supply and billing company 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 (paying 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.

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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.