Fraud, Waste and Abuse Monthly Round Up March 2025

Monthly round up There have been no updates from the PSR since we last reported, but plenty of FWA activity around the world.

FWA around the world

New York doctor facing jail following conviction for $24 million Medicare fraud scheme Dr Alexander Baldonado, aged 69, was found guilty by a jury for causing over $24 million fraudulent claims to Medicare which were not medically necessary. The Australian equivalent would be that the services were not “clinically relevant” which is our legal threshold standard. Like the U.S standard, our “clinical relevance” standard also means that all services must be necessary for the treatment of the patient. Our standard therefore operates very similarly to the U.S standard. Dr Baldonado authorised hundreds of unnecessary tests for Medicare patients who attended COVID-19 testing events, but he was not treating any of them and, in many cases, he did not speak to or examine the patients prior to ordering the tests. He also billed Medicare for fictitious consultations and received illegal cash kickbacks and bribes from the owner of a medical equipment company in exchange for ordering medically unnecessary orthotic braces. Dr Baldonado has been remanded in custody and will be sentenced in June 2025. You can read the Department of Justice report here. Louisiana doctor sentenced to 87 months jail for $5.4 million healthcare fraud scheme Dr Adrian Dexter Talbot, aged 59, owned and operated clinics that accepted cash payments for patients seeking controlled substances, such as opioids. He was found to have pre-signed prescriptions for patients he did not see or examine. With Dr Talbot’s knowledge, these patients then filled their prescriptions through their various insurance entitlements, which were a mix of public and private insurers. This resulted in findings of fraudulently billing controlled substances that had been prescribed without determining medical necessity. You can read the Department of Justice report here. Couple faces jail after pleading guilty to $1.2 billion health care fraud scheme Alexandra Gehrke, 39, and her husband, Jeffrey King, 46, pleaded guilty to causing the submission of a massive $1.2 billion in fraudulent health insurance claims for medically unnecessary wound grafts that were applied to elderly and terminally ill patients. Our Australian Medicare system reimburses services not products and when you read cases like this one it makes you feel grateful that we have never gone down the product route on a fee-for-service basis. This is a very unsettling and egregious case that you can read about here. Woman jailed for 9 years after pleading guilty to fraudulently submitting unnecessary respiratory test insurance claims during the Covid-19 pandemic Lourdes Navarro, 66, and Imran Shams owned a pathology laboratory and added expensive respiratory pathogen tests to Covid-19 tests that were not medically necessary. Together, Navarro and Shams billed approximately $369 million for the unnecessary tests and were reimbursed approximately $46.7 million. Shams pleaded guilty in January 2023 to conspiring to commit health care fraud and concealment of his exclusion from Medicare and was sentenced to 10 years in jail. Navarro pleaded guilty later, in October 2023, and has now been sentenced. This case presents an interesting contrast to a similar phenomenon reported in Australia which you can read about here. It is notable that we described what appears to be the exact same thing – adding on unnecessary pathology tests - as a rort rather than fraud, and instead of jailing the perpetrators we sent them warning letters. You can read the Department of Justice report here. Psychologist pleads guilty to defrauding health insurance scheme In South Africa, Penelope Homu, aged 41, pleaded guilty to charges of fraud and was sentenced to a fine of R120,000 (approximately $10,500 AUD) or five years jail. This case describes a very common type of healthcare fraud seem globally which is that of submitting claims for services that were never provided and falsifying information to make everything look legitimate. In this case, Homu received R555,000 (approximately $48,000 AUD) in fraudulent payments. You can read about the case here. Speech Therapist and Audiologist faces fraud charges for fictitious services In another South African case, Dr Lesiba Morgan Gololo, a speech therapist and audiologist, appeared before a Magistrate's Court facing charges of fraud amounting to R1.2 million (approximately $105K AUD). He was released on bail. This is another case in which it is alleged that the accused submitted false documents in support of medical insurance claims for services that he did not provide. You can read about the case here.