Telemedicine CEO Guilty In US$424M Medicare Fraud Scheme

By Paige Minemyer

The CEO of a telemedicine company has pleaded guilty for his role in one of the largest healthcare fraud schemes the feds have ever investigated. 

The Department of Justice (DOJ) filed charges against 24 telemedicine executives, medical device company executives and physicians in April alleging the defendants were involved in a “complex, multi-layered scheme” to defraud Medicare, with losses totaling US$1.2 billion. 

DOJ said that the involved medical device companies paid kickbacks and bribes to physicians at telemedicine companies in exchange for referrals for back, shoulder, wrist and knee braces that were not medically necessary.

All told, more than US$1.7 billion was billed to Medicare under the scheme, with US$900 million paid out. 

DOJ announced Friday that one of the indicted telemedicine executives had entered a guilty plea in the case. Lester Stockett, 52, of Medellin, Colombia, pleaded guilty to one count of conspiracy to defraud the US and one count of conspiracy to commit money laundering. 

Stockett was the owner of Video Doctor USA and Telemed Health Group, or AffordADoc, with the two companies known collectively as the Video Doctor Network. He also served as CEO of AffordADoc. 

As part of the plea, Stockett admitted to receiving bribes from patient recruiters, pharmacies, brace suppliers and other companies in exchange for getting physicians working for his company to prescribe the medically unnecessary braces. 

Often, these braces were prescribed after a short phone call between the doctor and the patient, who had no previous relationship with that physician, according to DOJ. In total, the co-conspirators billed Medicare for US$424 million in medically unneeded orthopedic braces and were paid US$200 million. 

Stockett also admitted that he and other executives at Video Doctor Network defrauded investors who believed the telemedicine company was legitimate, and also engaged in domestic and international money laundering.

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