Goldsboro physician Randy Lee Swackhammer faces a U.S. Attorney Office charge in an alleged $5 million conspiracy to commit health care fraud.
Swackhammer, 60, who faces one count of conspiracy to commit health care fraud, was among those charged in what federal officials described as one of the largest health care fraud schemes ever involving telemedicine and durable medical equipment marketing executives.
“Dr. Swackhammer is aware of the pending charges and is taking steps to respond to them appropriately,” said his attorney, Wes Camden of Raleigh. “Significantly, the conduct alleged in the criminal information does not relate to his work with his patients at Swack Medical Associates in Goldsboro.”
Wayne UNC Health Care officials said the hospital is aware of the charges against Swackhammer, a private community physician. Wayne UNC Health Care did not employ him during the time frame noted in the charge and does not currently employ him.
The FBI and the U.S. Department of Health and Human Services Office of the Inspector General were involved in the investigation, which the Department of Justice prosecuted.
The alleged fraud involved Swackhammer writing medically unnecessary orders for durable medical equipment, such as knee braces, while working for a telemedicine company, in many instances with only a brief telephonic conversation with the patients, according to federal district court documents.
From about September 2016 through about November 2018, Swackhammer was working as an independent contractor for a Delaware telemedicine company authorized to conduct business in Florida, according to the court documents, filed March 29 in U.S. District Court for the Eastern District of Pennsylvania.
During that time, Swackhammer allegedly conspired with the company and others “to unlawfully enrich themselves” by submitting false and fraudulent claims to Medicare for services that were medically unnecessary, not eligible for Medicare reimbursement nor provided as represented, according to the court documents.
The false claims to Medicare were concealed as were the receipt and transfer of the proceeds from the fraud and the diverting of proceeds from the fraud for the personal use and benefit of Swackhammer and his co-conspirators and to further the fraud, according to the court documents.
Swackhammer gained access to thousands of Medicare patients, the court documents read, through his work as an independent contractor for the telemedicine company that provided purported telemedicine consultations.
International call centers, durable medical equipment providers and other patient recruiters targeted Medicare beneficiaries with advertising and then used telemarketing to upsell the elderly and disabled to get them to accept numerous “free or low-cost” durable medical equipment items, regardless of medical necessity.
Swackhammer received unsigned prescriptions for orthotics braces, which were transmitted from a call center, the telemedicine company and others for him to sign, according to the court documents.
The documents add that he signed the doctors’ orders for the braces regardless of medical necessity, in the absence of a pre-existing doctor-patient relationship, without a physical examination and/or frequently based on a brief telephonic conversation with the Medicare beneficiary.
The court document includes a notice of forfeiture requiring Swackhammer forfeit any property, real or personal, derived directly or indirectly from the gross proceeds “traceable to the commission of the offense, including, but not limited to, the sum of $139,000.”
If for whatever reason that is not possible, it is the court’s intent to seek forfeiture of “any other property of the defendant up to the value of the property subject to forfeiture.”
The investigation resulted in charges against 24 defendants, including the CEOs, COOs and others associated with five telemedicine companies, the owners of dozens of durable medical equipment companies and three licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $1.2 billion in loss, as well as the execution of more than 80 search warrants in 17 federal districts, according to a statement from the U.S Department of Justice.
Also, the Center for Medicare Services, Center for Program Integrity announced that it took adverse administrative action against 130 durable medical equipment companies that submitted more than $1.7 billion in claims and were paid more than $900 million.
According to the statement, the charges target an alleged scheme involving the payment of illegal kickbacks and bribes by durable medical equipment companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that are medically unnecessary.
Some of the defendants allegedly controlled an international telemarketing network that lured hundreds of thousands of elderly or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America, the statement adds.
The defendants allegedly paid doctors to prescribe durable medical equipment either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen.
The proceeds of the fraudulent scheme were allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts and luxury real estate in the United States and abroad.