According to a Department of Justice press release issued December 21, 2016, the owners of a Mississippi medical supply company have pled guilty to their role in a Medicare fraud scheme.  Larry Carlton Jenkins, of Stringer, Mississippi, pled guilty to one count of making a false statement relating to a health care matter.  Annie Elizabeth Jenkins, also of Stringer, Mississippi, pled guilty to one count of committing a misprision of felony.

Larry Jenkins and Annie Jenkins owned and operated Available Medical Supplies, Inc. (“AMS”), a business which purported to provide medical equipment and compounded inhalation drugs in and around Laurel, Mississippi. AMS, as a medical provider, submitted claims for reimbursement to the Medicare program.

The fraud scheme began in July 2007 when the Centers for Medicare/Medicaid Services revised the nationwide policy regarding compounded inhalation solutions and all claims for compounded inhalation solutions were denied as not medically necessary for dates of service on or after July 1, 2007.  AMS, after July of 2007, at the direction of Larry Jenkins, continued to compound inhalation drugs but billed Medicare for reimbursement as if they were non-compounded drugs.  Larry Jenkins falsely represented on Medicare reimbursement claims that the inhalation drugs were non-compounded inhalation drugs in order to receive reimbursement for non-billable drugs that had been determined to not be medically necessary.

Annie Jenkins, the compliance officer, knew of the false statements being made, failed to notify the appropriate authorities, and took affirmative action to conceal the fraudulent billing.

Larry and Annie Jenkins will be sentenced on March 7, 2017, at 10:00 a.m. by U.S. District Judge Keith Starrett in Hattiesburg, Mississippi. Larry Jenkins faces a maximum sentence of five years in prison and a $250,000 fine. Annie Jenkins faces a maximum sentence of three years in prison and $250,000 fine.

The cases against Larry and Annie Jenkins are criminal cases.  However, under the qui tam provisions of the False Claims Act, whistleblowers with information about similar fraud against the government may bring a civil case on behalf of the United States. If successful, the government can recover up to three times the amount the defendants fraudulently billed the government.  The whistleblower, who originally filed the case, is entitled to 15-30% of the government’s recovery as well as their attorney’s fees.

To learn more about Medicare Fraud, click here.