High Profits ‘Relevant’ to Motive in Power Chair Fraud Case

CINNCINATI–High profit margins were properly allowed as
“relevant evidence” in a case that charged a power wheelchair
provider with Medicare fraud, the Sixth Circuit Court of Appeals
has ruled.

In an appeal of his 2003 conviction on 22 felony
counts–including health care fraud, mail fraud, illegal kickbacks
and money laundering charges–Hussein Amr, owner of United States
Medical Supply in Livonia, Mich., argued the government’s use of
his high profit margins on power chair sales was either not
relevant to the case or produced “unfair prejudice.” But the court
disagreed, saying that the evidence showed Amr steered patients who
wanted or needed less expensive chairs to the power wheelchairs. In
addition, he did not inform patients that they had a right to lease
the power equipment.

“[Amr] did so because otherwise he would not have obtained the
over $4,000 profit per power wheelchair sold,” wrote Senior Judge
Cornelia G. Kennedy in a May 25 ruling. “Thus, since the evidence
was relevant to establishing [Amr’s] motive, the district court
properly admitted the evidence ….”

Amr was originally indicted in 2000 for “inducing patients to
purchase power chairs they did not want or need, offering free lift
chairs to induce patients to purchase power wheelchairs, failing to
offer patients the option of renting rather than purchasing the
wheelchairs, charging for standard accessories which were already
included in the wheelchairs and inflating repair charges.”

The government said that the DME provider purchased power chairs
for $2,250, then billed Medicare $4,300 and an additional $800 for
accessories, resulting in a total reimbursement request of $5,100.
USMS would then receive a co-pay of $1,200, usually from Medicaid
or Blue Cross, resulting in a total of $6,300–and a profit of more
than $4,000–from the sale of one power chair.

Upon his conviction, the jury ordered Amr to forfeit more than
$1 million.