On October 2, 2020, federal prosecutors in Massachusetts charged three individuals for their alleged role in a complex durable medical equipment (“DME”) marketing scheme. Of note, two of the three were also charged with criminal violations of the Health Insurance Portability and Accountability Act (“HIPAA”). Pursuant to the arrangement, Nathan LaParl and Talia Alexandre operated marketing companies that allegedly engaged foreign call centers to market DME to, and obtain insurance information from, Medicare beneficiaries. To aid in the scheme, it is alleged that LaParl used MVP, a healthcare clearinghouse tool, to confirm Medicare beneficiary eligibility for certain products. LaParl was improperly provided access to the tool by EI Medical, Inc., a Medicare-enrolled wheelchair and scooter repair company. EI Medical shared the tool with LaParl in exchange for a $0.25 fee for each patient eligibility check conducted by LaParl. During the course of the scheme, LaParl allegedly accessed the protected health information of over 350,000 patients.
Upon confirming beneficiary eligibility through the clearinghouse tool, LaParl and Alexandre then sold the patient information to Juan Camilo Perez Buitrago for more than $1.6 Million. Perez Buitrago, charged earlier this summer, used the beneficiary data to submit over $109 million in fraudulent DME claims to Medicare.
Stefanie Hirsch, the owner of EI Medical, and LaParl are each charged with one count of a criminal violation of HIPAA. In addition, LaParl and Alexandre are charged with one count of violating the Anti-Kickback Statute.
How Frier Levitt Can Help
Continued government enforcement activity reinforces the necessity for every healthcare marketing arrangement to be reviewed by competent healthcare counsel. In addition to more typical Anti-Kickback Statute concerns, marketing arrangements must also be scrutinized to assess any transfer or access of data protected by HIPAA. Violations of HIPAA can expose individuals to large fines and, as demonstrated above, criminal liability. Contact Frier Levitt for review of your marketing arrangements and your company’s overall HIPAA compliance.
