A Henderson, Nevada, doctor allegedly billed Medicare more than $95 million for expensive wound grafts that prosecutors say elderly patients did not medically need.
Stephen Dubin, 74, is the sole owner of Dubin Medical Consultants Inc., also known as Wound MD. Some of the patients who received the amniotic wound allografts were in hospice care.
Medicare paid more than $54 million on the submitted claims. According to Fox 5 Las Vegas, investigators also accuse Dubin of altering medical records and receiving illegal payments from companies supplying the grafts.
A federal grand jury charged him with conspiracy to commit health care fraud and five counts of health care fraud. The indictment says proceeds from the alleged operation supported a lavish lifestyle that included having multimillion-dollar yachts built.
Distributors Allegedly Lowered His Real Cost Through Kickbacks
Dubin obtained wound allografts from two distributors, according to the U.S. Attorney’s Office for the District of Nevada. Prosecutors say both companies provided illegal kickbacks, bribes or rebates connected to his purchases.
Some of the payments were structured to appear as legitimate “Rebate Agreements.” Investigators allege that the arrangements concealed the true nature of the payments while substantially reducing the amount Dubin actually spent to acquire the grafts.
One distributor also allegedly sent kickback payments through a pass-through bank account held in the name of a shell company. Prosecutors say the payments were made in exchange for Dubin continuing to purchase that distributor’s products.
Medicare Was Billed Using Sham Full-Price Invoices
The lower prices Dubin allegedly received were not reflected in the claims sent to Medicare. The indictment says he instead sought reimbursement using sham invoices showing the grafts at their full listed prices rather than the lower net amount he paid after rebates and other payments.
That created a gap between Medicare’s reimbursement and the true acquisition cost of the products. Dubin and others kept the difference as profit, according to prosecutors. The submitted claims exceeded $95 million, and Medicare paid more than $54 million.
Hospice Patients Received Grafts Prosecutors Say Were Not Needed
The grafts were allegedly applied to elderly Medicare patients without regard to medical necessity. The patient group included people receiving hospice care. Some grafts were placed on infected wounds or wounds that were not responding to the treatment, according to the indictment.
In other cases, prosecutors say conservative wound-care treatments required by Medicare had not first been attempted, completed or confirmed. Investigators also accuse Dubin and his alleged co-conspirators of using graft quantities that greatly exceeded the actual size of patients’ wounds.
Dubin selected products based on which grafts would generate the greatest profit rather than which treatment best served the patient, according to the charges.
Medical Records Were Allegedly Changed to Support the Claims
Medicare coverage depended partly on records showing that the graft applications were reasonable, medically necessary and compliant with program requirements. Investigators say Dubin falsified patient files to conceal the lack of medical necessity.
The records were allegedly altered to make it appear that the treatments met Medicare’s requirements when prosecutors say they did not. Although the indictment refers to co-conspirators, the Justice Department’s announcement names only Dubin as a defendant.
The indictment says Dubin used money from the alleged scheme to finance an expensive lifestyle, including having multimillion-dollar yachts constructed for him.
He Faces Six Federal Fraud Counts
A federal grand jury returned the indictment on August 4. Dubin faces one count of conspiracy to commit health care fraud and five substantive health care fraud counts. Each charge carries a maximum possible sentence of 10 years in federal prison.
The FBI, the Department of Health and Human Services Office of Inspector General and the Defense Criminal Investigative Service are investigating the case. No guilty plea, conviction or final court resolution had been reported when the charges were announced.
Patients and Families Should Review Every Medicare Claim
Medicare beneficiaries and authorized caregivers should compare each Medicare Summary Notice with the appointments and treatments the patient actually received. They should look for unfamiliar providers, repeated wound-graft applications, incorrect treatment dates or quantities that do not match their recollection.
Patients can also sign in to their secure Medicare accounts to review claims after Medicare processes them. A questionable entry should first be discussed with the listed provider in case it resulted from a billing mistake.
Before agreeing to an expensive or repeated wound treatment, patients and caregivers can ask why it is medically necessary, what alternatives have been attempted, how much of the wound will be covered and what benefit the provider expects. Families caring for a hospice patient should ensure that the hospice team knows about outside treatments and can explain how they fit the patient’s care plan.
Suspected fraud can be reported through Medicare’s fraud-reporting system or by calling at 1-800-633-4227. Callers should have the provider’s name, the disputed service, the treatment date and the relevant Medicare claim information available.