By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
When federal agent Jason Meadows interviewed the elderly resident at the Primrose Oaks senior living center in Oak Cliff, the man presented him with a business card for Universal Health.
"Here's your crook," the man told Meadows, according to a recently unsealed affidavit filed in federal court. The name on the business card was Ignatius Chuka Ogba, a 45-year-old Frisco resident otherwise known as "Chuck."
Ogba allegedly told the man that he could make anywhere from $50 to a few hundred dollars for each resident he referred who obtained a "free" wheelchair through Universal Health. Though Primrose Oaks manager Detria Keeling turned down Ogba's offer of $1,000 per referral, others, including a minister and his wife, went along, according to the affidavit.
Though virtually none of the Primrose Oaks residents met the requirements for the benefit, McGriff allegedly wrote a "certificate of medical necessity" and a prescription for them to receive "K-11" wheelchairs. Universal Health took the seniors' Medicare information and billed the government for up to $9,000 per wheelchair.
Designed for people with limited upper body strength, the K-11 is a high-tech wonder driven by a joystick, small and sophisticated enough to maneuver indoors. Medicare pays for 80 percent of the cost, with the patient or private insurance picking up the rest. Medicare pays an average of $5,200 per wheelchair, but add-on accessories can bring the total up to $10,000, making it one of the most expensive items for which Medicare will reimburse.
In the mid- to late '90s, technological advancements made power wheelchairs usable in the home, as required by Medicare to qualify for the reimbursement. That plus the aging population contributed to a 450 percent increase in spending on wheelchairs over the past four years. Reimbursements in Texas jumped from $34.7 million in 1999 to more than $170 million in the first nine months of 2003. But a huge portion of that increase was outright fraud, federal officials claim.
From May 2002--when Ogba set up his company in a strip shopping center on C.F. Hawn Freeway and obtained a Medicare "supplier number"--to an early-morning raid in February, Universal Health billed Medicare $7,041,500 for hundreds of patients in nine states. Recruiters scoured senior centers, malls, nursing homes, any place catering to seniors, for "patients." Before Medicare stopped payments, Ogba's company had received more than $3 million.
But few of the patients at Primrose Oaks ever received a K-11, authorities say. Some received a much cheaper scooter, which they didn't really need.
The alleged scam came to an abrupt end at 7 a.m. February 5. That's when 137 federal agents simultaneously descended on 15 locations around Dallas, pulling Ogba, McGriff and nine others from their beds.
Those arrested on February 5 had billed Medicare for more than $36 million, with $15 million paid out. Though it's unclear from court documents how--or if--they were related, most of the companies involved were set up in the summer or fall of 2001. According to court documents, several allegedly were in cahoots with individuals in Houston and East Texas. And some Dallas busineses operated out of different suites in the same strip center at 5415 Maple Ave.
Multiple suppliers working out of the same address should have triggered some suspicion, says Eric Sokol, director of the Power Mobility Coalition, which represents manufacturers and suppliers of equipment for the disabled. Government billing contractors are required by law to perform unannounced site visits before awarding new suppliers billing numbers.
"These syndicates were allowed to run unfettered," Sokol says. "These guys found the soft underbelly of the Medicare program and were able to exploit it."
Sokol says that members of his coalition notified the Center for Medicare and Medicaid Services (CMS) last April about large spikes in wheelchair sales in Texas, but the government didn't react until September. That's when CMS put into place a 10-point "Operation Wheeler Dealer" program to prevent fraud.
In November, seven Houston-area doctors and suppliers were indicted for wheelchair fraud.
"They would go to nursing homes, assisted living facilities or malls and induce seniors to ride with them on the bus to see the doctor," Sokol says. "Sometimes they'd give them a free lunch or $100. Even if someone said he didn't need a wheelchair, they'd say, 'Medicare is about to pull this benefit. You should get it now.' These fly-by-night guys would get paid, and the patients would get nothing or a scooter that cost much less. Not only was it ripping off the government, it was ripping off the patients. They might have gotten a free lunch, but they have lost their ability to get a wheelchair in the future if they need it."
Timothy Menke, special agent in charge at the inspector general's office with Health and Human Services, coordinated the Dallas investigation. It included the FBI, the criminal investigation division of the IRS, the Postal Inspection Service, Immigration Customs Enforcement and local police.
Menke denies that the government dragged its feet when notified of the fraud.
"When we found out about it, we reacted immediately," says Menke, who came to Dallas last year as SAC. "This was very egregious and blatant, so I made a priority to focus on this. This particular operation took four months. That is moving very quickly." He points out that 91 of the 400 federal agents with HHS nationwide worked on the Dallas investigation, which is continuing.