Brooklyn medical supply co. owner, staff nabbed for $3.2M Medicaid fraud
Nkem Udeh, the owner of Advance Medical Supply Inc. in Crown Heights; her brother and store manager Humphrey Udeh; two of her employees, Keva Johnson and Yolane Fouche; and the store itself have been accused by the state Attorney General’s Office of fraudulently billing Medicaid over $1.7 million and billing HealthFirst, a health insurer for Medicaid recipients, for another $1.5 million.
The company and its employees billed the state Medicaid program, both directly and through managed care, for nearly a million units of a highly-specialized and expensive liquid pediatric nutritional formula for kids that they claimed the dispensed.
In fact, according to the state Attorney General’s Office, the company did not dispense the expensive formula. Instead, it reportedly dispensed over-the-counter nutritional supplement formulas, such as Pediasure. The defendants face up to 25 years in prison on grand larceny charges.
“The defendants’ formula for fraud was to file inflated claims for medicine designed to help needy children with rare illnesses. The scam drained millions of taxpayer dollars, money the defendants turned around and used for their own personal benefit,” NYS Attorney General Eric T. Schneiderman said.
The investigation found that between January 2010 and September 2012, Advanced Medical, a supplier of orthotics and prosthetics located at 1162 St. John’s Place, fraudulently received $3,178,183 from Medicaid and HealthFirst, a managed care organization, for allegedly dispensing 946,874 units of a high-priced liquid pediatric formula to Medicaid recipients.
Certain types of liquid nutritional formulas are prescribed for patients who cannot chew or swallow food and must obtain nutrients via a feeding tube.
These nutritional formulas are also prescribed for children who cannot absorb or metabolize nutrients from more substantial food.
The Attorney General’s investigation revealed that Advanced obtained reimbursement for a liquid that is known as B4162 formula but only dispensed Pediasure or other over-the-counter nutritional supplements — when they dispensed anything at all.
According to the Attorney General’s Office, Johnson and Fouche participated in the scheme by fraudulently obtaining prescriptions from physicians. They did so by convincing doctors and their staff to write generic prescriptions for “pediatric formula” rather than specifying the exact type of nutritional supplement required by the patient.
The case originated with a referral from the Office of the Medicaid Inspector General, whose investigators looked at Advanced Medical’s inventory and discovered that the company had none of the formula on hand for which it was charging Medicaid.
New York’s Medicaid Inspector General James C. Cox said, “Billing for medicine that isn’t provided is fraud. OMIG took a look at Advanced Medical’s shelves and saw none of the products that Medicaid was paying for. We are pleased that our referral led to arrests by the Attorney General’s Office, and we will prevent this company’s further participation in the Medicaid program by pursuing an immediate exclusion.”
In addition to the indictment, the Attorney General’s Office also obtained an order freezing the bank accounts and other property held by the indicted individuals and corporation up to $3,178,183, and freezing the bank accounts of other corporations and another individual up to the amount of proceeds they received from the conduct of the indicted criminal defendants.
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