An indictment unsealed in the Middle District of Florida accuses Oklahoma chiropractor Mark Loftis of running a scheme that billed Medicare, TRICARE and CHAMPVA for roughly $30 million in false claims and also misused COVID‑era Provider Relief Fund money.
The federal indictment centers on Mark Loftis, 38, of Cushing, Oklahoma, the owner of Back Pain Home Supplies LLC, doing business as EZ Medical Supply. Prosecutors say Loftis paid illegal kickbacks to marketers and to telemedicine companies in exchange for patient referrals and signed doctors’ orders that were never supported by meaningful medical evaluations. Those orders allegedly fed claims for orthotic braces and other durable medical equipment that were not medically necessary, not provided as billed, or obtained through kickbacks.
<p”As alleged, Loftis caused Back Pain to bill Medicare, TRICARE and CHAMPVA for DME that was medically unnecessary, obtained through the payment of illegal kickbacks, and not provided as billed,” prosecutors note, and the indictment says the company submitted about $30 million in false and fraudulent claims. The three programs paid approximately $8 million on those claims. The scheme as described relied on a network of marketers and telemedicine providers who signed orders without proper patient evaluation.
The indictment also alleges Loftis converted Provider Relief Fund dollars for personal use after receiving relief intended for health care providers hit by the pandemic. Under the Coronavirus Aid, Relief, and Economic Security Act, PRF funds were appropriated to help providers cover pandemic-related losses and costs of treating COVID-19 patients. Prosecutors say Loftis received more than $133,000 in PRF funds and falsely attested that he would use the money for health care expenses and to replace lost revenue, while diverting some of it to further the DME fraud and to pay personal expenses.
Federal authorities charged Loftis with one count of conspiracy to commit health care fraud and wire fraud, one count of conspiracy to defraud the United States and to offer, pay, solicit, and receive kickbacks, and two counts of theft of government property. If convicted, the indictment notes potential maximum penalties of 20 years in prison on the health care and wire fraud conspiracy count, five years on the conspiracy and kickback count, and 10 years on each theft count. A federal judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Investigators and prosecutors named in the announcement include Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division and U.S. Attorney Gregory W. Kehoe for the Middle District of Florida. Law enforcement leads include Special Agent in Charge Matthew Fodor of the FBI’s Tampa Field Office, Deputy Inspector General for Investigations Christian J. Schrank of the U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Jason Sargenski of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service Southeast Field Office, and Special Agent in Charge David Spilker of the Department of Veterans Affairs Office of Inspector General Southeast Field Office.
The agencies investigating the case are the FBI, HHS-OIG, DCIS, and VA-OIG, with Acting Assistant Chief Catherine Wagner of the Justice Department’s Fraud Section prosecuting the matter. The Fraud Section leads the Criminal Division’s efforts against health care fraud through the Health Care Fraud Strike Force Program. That program, the indictment points out, now includes nine strike forces across 27 federal districts and has charged more than 5,800 defendants since March 2007.
<p”Collectively those defendants have billed federal health care programs and private insurers more than $30 billion,” the department noted, and the Centers for Medicare & Medicaid Services, together with HHS-OIG, are said to be taking steps to hold providers accountable for involvement in health care fraud schemes. This case illustrates the continuing focus on fraud tied to durable medical equipment and pandemic-era relief funds.
The indictment marks the start of criminal proceedings; the charges are allegations and Loftis is presumed innocent until proven guilty in court. Prosecutors will pursue evidence, witness testimony, and transactional records to support the counts laid out in the unsealed documents, and the case will proceed through the federal court system in the Middle District of Florida.
