NEWS RELEASE
UNITED STATES ATTORNEY'S OFFICE
WESTERN DISTRICT OF VIRGINIA
John L. Brownlee United States Attorney Heidi Coy Public Affairs Specialist |
BB&T Building 310 1st Street, S.W., Room 906 Roanoke, Virginia 24011 (540) 857-2250 FAX (540) 857-2180 |
(Reposted 9/11/2006)
PARTNER IN WHEELCHAIR COMPANY PLEADS GUILTY TO CONSPIRACY TO COMMIT MAIL FRAUD, HEALTH CARE FRAUD, TELEMARKETING FRAUD, AND MONEY LAUNDERING
United States Attorney John L. Brownlee and Virginia Attorney General Robert F. McDonnell announced today that Jan Michael Bliwas, of Worthington, Ohio, pleaded guilty to a one count information charging him with conspiracy to commit mail fraud, health care fraud, telemarketing fraud, and money laundering.
“Mr. Bliwas was involved in an intricate scheme aimed at getting the maximum amount of money possible from Medicare and Medicaid, often adding on and billing Medicare for expensive wheelchair extras that the patients didn’t really need,” said United States Attorney John Brownlee. “We hope this case sends the message that we will prosecute and punish those who commit this type of fraud.”
“This joint investigation is a further demonstration of the good work that can be done when federal and state partners work together. I applaud the United States Attorney's Office for the Western District of Virginia, the Department of Health and Human Services Office of the Inspector General, the IRS, and our Medicaid Fraud Control Unit for this important victory on behalf of the people of Virginia,” said Virginia Attorney General Robert F. McDonnell.
According to evidence presented by Assistant United States Attorney C. Patrick Hogeboom, III, beginning in March, 2002, Bliwas was part owner of CBI Company, LLC, which did business as Active Solutions. Active Solutions was a durable medical equipment supplier with offices located in Worthington, Ohio and Boardman, Ohio. Active Solutions sold motorized wheelchairs to Medicare and Medicaid beneficiaries and had customers in areas of Virginia, including Lynchburg, New Castle, and Vinton. Bliwas was responsible for the marketing and commercial production for Active Solutions.
Bliwas designed a commercial that showed people using three wheel scooters, described as “Freedom Scooters.” The voice over stated that the “Freedom Scooter picks up easily so you can take it anywhere.”
Bliwas purchased air time for this commercial which was aired between May and September of 2004 on WDBJ, Channel 7 in Roanoke. The commercial generated numerous leads, including several in the Lynchburg Division.
Staff in Ohio took all sales calls. Staff members were trained to handle the leads in a specific manner. The company would not process any claim unless Medicare was the primary coverage. Throughout the process, the sales staff was required to refer to the product as a “power chair scooter.” This term was developed by the company in order to confuse the beneficiary.
The inside sales representatives attempted to have specific portions of the Certificate of Medical Necessity checked by the doctor to insure that the maximum amount possible could be charged to Medicare. They were instructed to add so-called “comfort items” to increase the Medicare billings and the sales representative’s commission. In many cases, these items were added after the physician signed the CMN and in direct contradiction to the certification in which the physician certified that all portions of the CMN had been reviewed prior to signing.
Several of the beneficiaries resided in the Lynchburg Division. Beneficiary CS saw the television advertisement and contacted Active Solutions. A Lynchburg doctor prepared a prescription on February 13, 2004 and faxed the prescription and a completed CMN to the company. The motorized wheel chair was delivered on March 10, 2004. The outside sales representative noted that CS lived in a mobile home; was building a ramp; and planned to use the motorized wheel chair outside to get around the yard better. Active Solutions was sent a payment from Medicare in the amount of $5,984.11 and Medicaid paid $1,496.03, which included an additional charge for a non-standard seat. When agents measured the seat, it was found to be standard width.
Medicare and Medicaid beneficiary HT contacted Active Solutions on March 26, 2004, after watching a television commercial showing scooters. A Lynchburg physician wrote a prescription for a power chair scooter which was faxed to Active Solutions, as well as a completed CMN. On April 8, 2004, a motorized wheel chair was delivered to HT. Medicare subsequently paid $5,372.41, while Medicaid paid $1,343. The billings included extra charges for elevated leg rests and a fully reclining seat. VH did not require elevating leg rests and the seat did not fully recline.
On April 21, 2005, VH a resident of Vinton, Virginia called Active Solution after viewing the commercial. Her doctor provided by facsimile a prescription and CMN to Active Solutions. VH received her motorized wheel chair on May 3. The outside sales person noted on the Product Delivery Report that where VH currently lived there “is no way to get her out” and there was “some room to maneuver.” Despite these problems, the chair was left with VH.
VH discovered the next day that the product did not operate. She began calling Active Solutions immediately and got little or no response. On August 19, 2004 a relative called Active Solutions and an Active Solution agent noted that the “chair won’t do anything” and VH had the product “since May, not budged yet”. The Active Solutions employee informed VH’s relative that the company no longer services equipment in VH’s area and they should call Medicare for a list of local suppliers.” VH and her relatives continued calling, but either got no response or were told to call Medicare.
However, on December 5, 2005, a Medicare representative called Active Solutions in regards to VH’s problem. On December 12, 2005, VH received a letter dated December 8 from Active Solutions which stated that due to the current financial situation of the company "...we are no longer able to service your power wheelchair/scooter.”
The co-conspirators conducted numerous financial transactions with the proceeds of their fraudulent activities. Proceeds were used to pay personal expenses, including Bliwas’ personal legal fees relating a criminal matter in Ohio. Additionally, the conspirators used proceeds to obtain vehicles, including for Bliwas and his wife, who was not associated with the company.
Bliwas faces a maximum of five years in prison and a fine of $250,000.
The case was investigated by the Department of Health and Human Services, the Internal Revenue Service, The Federal Bureau of Investigation, the Virginia Attorney General’s Medicaid Fraud Control Unit. Assistant United States Attorney C. Patrick Hogeboom, III, and Special Assistant United States Attorney Charlene Day prosecuted the case.