Health Care Fraud – Mary Lou Hernandez Sentenced to Prison and Over $4 Million in Restitution!

Sometimes people get the idea that since the federal government is so big – it just can’t police itself and hence it is an easy target for crime. Yet, all to often, those who take advantage of this illusion are often caught and find that there is another branch of the government they get the opportunity to experience – the Bureau of Prisons.

That’s the case for Mary Lou Hernandez, owner of Angel Care Medical Supply, who was sentenced to 2 years in federal prison and ordered to pay $4,409,518 in restitution. Now, (not that I’m proud of this) but having spent time in federal prison, I know that the next two years for her will be life changing. Prison is no fun. But, facing a $4+ million bill when she gets out is daunting – especially for a convicted felon. How that will get repaid is mind boggling.

According to the facts, on November 16, 2006, Hernandez pleaded guilty to a 3-count Information charging her with conspiracy to commit Health Care Fraud, Health Care Fraud and violation of the Anti-kickback statute.

A Certificate of Medical Necessity (CMN) documents a beneficiary’s physician’s conclusion that durable medical equipment (DME) such as wheel chairs, hospital beds, ventilators and oxygen equipment is medically necessary and reasonable for the treatment of an illness or injury. Hernandez admitted that beginning in 2000, she paid between $800 and $1,000 in kickbacks to five San Antonio area physicians for each CMN. Hernandez also admitted to submitting false Medicare and Medicaid reimbursement claims for DME. The factual basis alleges that from January 13, 2001, to September 30, 2004, ACMS was overpaid $3,032,404.94 by Medicare and $1,377,114 by Medicaid.

Now, one would have to believe that Hernandez, while paid over $4+ million has spent the money. I doubt that she has it sitting in a savings account somewhere. Hence the issue of restitution is significant.

Every choice has a consequence. As a white collar crime and business ethics speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While Hernandez may have looked good for a time and avoided the consequences – she did not avoid the consequences all together. Prison is no fun and Hernandez is facing two years in prison for her conviction. Serving time will prove to be a dramatic change from her prior activities. You do reap what you sow.

If anyone reading has any background on Hernandez or Angel Care Medical Supply – feel free to comment as I study the behaviors and backgrounds of those convicted of white collar crime.

White Collar Crime Speaker – Chuck Gallagher – signing off…

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One Response to Health Care Fraud – Mary Lou Hernandez Sentenced to Prison and Over $4 Million in Restitution!

  1. Mary says:

    As a former owner of a large DME, I know that it is possible to run an honest, ethical business that is profitable, successful and good for government and people.

    The problem with the medical supply business is that people beleive that the government should pay for all aspects of their healthcare needs and wants. As I remember, over weight people often wanted electric wheelchairs to drive around town in. People with spider veins wanted compression hose to remedy aches and pains associated with poor circulation. In cases like these, specific individuals often got what they wanted by pressuring medical providers to over-prescribe. This was just not fair to the people with real needs.

    The plain reality is that people have unlimited wants, with limited means. The complexity and paperwork insanity invovled in the reimbursement process was fraught with problems for institutions and individuals alike.

    It is nice to think that we can place all the fault of fraud on specific individuals or organized institutions like government, but the problem of fraud is both individual and systemic.

    Quite simply, when people have to pay for items out-of-pocket, they will shop around for the quality products at a good value. When the health becomes a matter of personal responsibility , and reimbursements become a secondary matter, the pressure of greed and fraud will be alleviated.

    This does not mean that I think that people, who need assistance should not get it. I am concerned that the new changes in healthcare will lead to increased pressure on an already faltering system. I fear that the road to a perfect healthcare system will be one that is filled with many more challenges.

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