Owner of DME Software Company Convicted of $1B Medicare Fraud

FLORIDA—The founder and owner of durable medical equipment software company HealthSplash was convicted for his role in operating a platform that allegedly generated false doctors’ orders and prescriptions to defraud Medicare and other federal healthcare benefit programs out of more than $1 billion.

According to court documents and evidence presented at trial, Brett Blackman of Johnson County, Kansas, and his co-conspirators aggressively targeted hundreds of thousands of Medicare beneficiaries to get them to accept medically unnecessary orthotic braces and other items. They then allegedly arranged for purported telemedicine doctors to sign fraudulent prescription orders for these items, so that their co-conspirators could bill Medicare for them. All told, Blackman and his co-conspirators billed Medicare and other federal healthcare benefit programs over $1 billion for this unnecessary equipment.

Blackman owned, controlled and was the CEO of HealthSplash, which acquired Power Mobility Doctor Rx, LLC (DMERx) in September 2017. DMERx was an internet-based platform that generated false and fraudulent doctors’ orders for durable medical equipment (DME) and prescriptions for other items. As part of the scheme, Blackman and his co-conspirators connected pharmacies, DME suppliers and marketers with telemedicine companies that would accept illegal kickbacks and bribes in exchange for signed doctors’ orders created using the DMERx platform. Blackman and his co-conspirators took a cut for themselves in exchange for the referrals.

The fraudulent doctors’ orders and prescriptions generated by DMERx falsely represented that a doctor had actually examined and treated the Medicare beneficiaries when, in fact, the doctors were paid to sign orders and prescriptions without any meaningful interaction with the beneficiary, and in some cases, no interaction at all. Doctors signed these orders and prescriptions without regard to whether the equipment was medically necessary. Testimony and evidence presented at trial from an undercover agent who posed as a Medicare beneficiary showed the scheme in action—starting with a foreign call center that pushed the undercover agent to agree to multiple braces to a doctor signing bogus orders for the braces using Blackman’s DMERx platform. The doctor’s order for one of these undercover agent beneficiaries claimed that the doctor conducted various tests that can only be performed in person even though the doctor never even spoke with the undercover agent “patient.”

The DME suppliers and pharmacies that were paying illegal kickbacks for these orders billed Medicare and other insurers for more than $1 billion. Medicare and the other insurers paid more than $450 million based on these claims. According to evidence presented at trial, Blackman and his co-conspirators concealed the scheme through sham contracts and by manipulating the doctors’ orders to avoid Medicare audits.

The jury convicted Blackman of conspiracy to commit healthcare fraud and wire fraud, conspiracy to pay and receive healthcare kickbacks and conspiracy to defraud the United States and to make false statements in connection with healthcare matters. Blackman’s co-defendant, Gary Cox, was convicted in a prior trial and sentenced to 15 years in prison. 

Blackman faces a maximum penalty of 20 years in prison for the conspiracy to commit healthcare fraud and wire fraud conviction, five years for the conspiracy to pay and receive healthcare kickbacks conviction and five years for the conspiracy to defraud the United States and to make false statements in connection with health care matters conviction. A sentencing hearing has been scheduled for August 26, 2026.