A fraudulent medical supply scheme targeted elderly Medicare and TRICARE beneficiaries

SPOKANE, Washington—Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced that Thomas Andrew Webster, M.D., age 50, of Sylvania, Ohio, has been charged by Filing of Information on one count of Conspiracy to Violate the Anti-Kickback Statue in connection with a fraudulent medical supply scheme that targeted elderly Medicare and TRICARE beneficiaries throughout Washington and in other states.

The Medicare program provides health insurance coverage for elderly and disabled Americans. The United States Department of Defense’s TRICARE program provides health benefits to United States Armed Forces military personnel, military retirees, and their dependents. Medicare and TRICARE provide health insurance coverage for eligible health care services, including, under certain eligibility conditions, for Durable Medical Equipment (DME). For DME to qualify for reimbursement, DME was required to be ordered by a physician who is treating the beneficiary for a specific illness or injury. The DME was also required to contribute to the physician’s treatment of the illness or injury or to the improvement of the patient’s physical condition.

During the relevant time period, Webster lived in Olympia, Washington, and was a licensed physician in Washington.  The Information charges that between May 2021 and September 2023, a company identified as “Company A” engaged in a telemarketing scheme to obtain beneficiary identifying and medical information by using telemarketers to contact Medicare and TRICARE beneficiaries in the Eastern District of Washington and elsewhere. According to the Information, Company A then used the information to create a fake medical record that reflected a doctor visit that never took place, and medical orders for DME. The Information charges that Webster then signed the fraudulent medical documentation and physician orders and that the fraudulent orders were then sold to DME companies that used the orders to bill Medicare and TRICARE falsely and fraudulently.

The Information further alleges that between May 2021 and September 2023, Medicare and TRICARE paid more than $13.7 million for DME fraudulently ordered and referred by Webster. These beneficiaries, which included many residents of the Eastern District of Washington, included individuals who had no desire or medical need for the DME, individuals who had elected for hospice care and who therefore were not eligible to be treated for most types of illness or injury under Medicare, and individuals who lacked the limb for which the defendant placed the DME order because it had been previously amputated.

The Information also alleges that, as part of the scheme, Webster received $839,565 from Medicare and TRICARE for fraudulent telemedicine visits that never took place.

“Telemarketing schemes that target and exploit the elderly are especially pernicious because they prey on those who are often most in need of a doctor’s independent judgment that is not tainted or biased by the doctor’s own personal financial interest,” said U.S. Attorney Waldref. "This is one reason that the U.S. Attorney’s Office, the Department of Justice, and our law enforcement partners, have made combatting elder fraud and abuse a top priority.”

The conspiracy offense carries a maximum sentence of up to five years in federal prison. The case is being investigated by HHS OIG and the Defense Criminal Investigative Service. An indictment or information is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.