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Long Island Medical Supplier Convicted of $10.7 Million Medicare Fraud and HIPAA Violations; Stole Over 1,000 Patient's Records

Posted on September 27, 2012 by Dissent

Last month, a federal jury in Central Islip, New York  convicted the owner of a Long Island medical supply company of a $10.7 million Medicare fraud and wrongful disclosure of private patient information.

The conviction of Helene Michel of Old Brookville, New York, was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Janice K. Fedarcyk, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office, and Thomas O’Donnell, Special Agent-in-Charge of Health and Human Services (HHS), Office of the Inspector General (OIG), Office of Investigations, New York.

The evidence at trial established that over the course of four and a half years the defendant stole private patient information from various nursing homes on Long Island and then submitted thousands of fraudulent claims to Medicare. The claims sought payment for services and equipment that were never provided by the defendant’s company, Medical Solutions Management, Inc., of Hicksville, New York. Among the fraudulent claims proven at trial was the defendant’s demand for reimbursement for supplying boots and braces to an elderly patient who was in fact an above-the-knee double-amputee.

The defendant then used the proceeds of the scheme to purchase a $2.2 million home in Old Brookville, New York, as well as to fund a pension plan for herself and an investment brokerage account collectively worth $2 million.

The defendant, who used the alias “Dr. Elene Allonce,” among others, was charged in a three-count superseding indictment in March 2012 with conspiracy, health care fraud and wrongful disclosure of patient information in violation of the Health Insurance Portability and Accountability Act, commonly known as “HIPAA.” The case represents one of the first criminal prosecutions in the nation for wrongful disclosure of patient information under HIPAA.

When sentenced by United States District Judge Joseph F. Bianco, Michel faces a maximum sentence of 10 years’ imprisonment on each count, as well as fines of up to $250,000 per count.

In a statement to PHIprivacy.net, Robert Nardoza of the U.S. Attorney’s Office for Eastern District of New York indicated that over 1,000 patients had their information stolen:

The evidence at trial included fifteen banker boxes of patient files maintained by defendant’s company. All, or virtually all, of these over a thousand patient files had original patient records that had been removed without authorization from the patients’ records in the nursing homes.

This type of fraud based on medical ID theft poses significant risks to patients who may at some point find legitimate claims denied because Medicare believes it has already reimbursed them or real providers for services or durable goods. I hope all Medicare beneficiaries carefully check all Explanation of Benefits statements so they stand a better chance of spotting fraudulent use of their information.

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