CEO of Health Care Software Company Convicted of $1 Billion in Medicare Fraud

CEO of Health Care Software Company Convicted of $1 Billion in Medicare Fraud

A federal jury in Miami convicted Gary Cox, the CEO of Power Mobility Doctor Rx, LLC, of six health care-fraud-related counts for his role in a scheme involving his software company that resulted in over $1 billion in false billings to Medicare.

According to the US Department of Justice (DOJ), Cox and his co-conspirators used the DMERx and HealthSplash Network internet platforms to orchestrate the fraud. Together, the co-conspirators used misleading mailers, television advertisements, and calls from offshore call centers to lure elderly victims into providing personally identifiable information. In turn, Cox and his conspirators used this information to order medically unnecessary medical products and devices, like orthotic braces and pain creams, and bill Medicare for payment. Cox’s DMERx platform generated false doctors’ orders to facilitate purchases of medical products. Cox also connected pharmacies, durable medical equipment (DME) suppliers, and marketers with telemedicine companies that would accept illegal kickbacks in exchange for signed doctors’ orders using DMERx.

The false doctors’ orders generated by DMERx falsely represented that a doctor examined the individuals receiving the medical products. These medical orders, however, were obtained by telemedicine companies that paid doctors to sign the orders without regard to medical necessity, or with minimal interaction with the patient. Cox and his co-conspirators coordinated the various illegal kickback transactions among DME suppliers, pharmacies, telemedicine companies, and doctors, and received payment for their role in facilitating the scheme. Cox and the co-conspirators concealed their conduct through sham contracts and went as far as editing doctors’ orders to remove words to avoid Medicare audits.

Cox was indicted and convicted as part of Operation Brace Yourself, which resulted in charges against 78 individuals nationwide for health care fraud offenses. This included one of his co-conspirators, Gregory Schreck, the former vice-president of HealthSplash, who pled guilty to one count of conspiracy to commit health care fraud in February 2025. Another co-conspirator, Brett Blackman, the former CEO of HealthSplash, began trial as Cox’s co-defendant but the court severed his case following a mistrial.

Read the DOJ’s press release here.

Military Health Plan Providers Cannot Dismiss FCA Suit

On June 2, Chief Judge Lance E. Walker of the US District Court for the District of Maine denied a motion to dismiss False Claims Act (FCA) claims brought by the DOJ against five military health care plan providers.

The defendants — Brighton Marine Inc., Christus Health Services, Martin’s Point Health Care Center, Pacific Medical Centers, and US Family Health Plan Alliance LLC — collectively administered benefits under the Uniformed Services Family Health Plan (USFHP) program. Another provider, SVCMC Inc. (formerly St. Vincent’s Catholic Medical Centers of New York), previously settled the government’s claims against it in February 2025, as we previously covered here.

The DOJ alleges that the providers knowingly retained substantial overpayments and conspired to conceal these funds from the government. The five providers filed a motion to dismiss the DOJ’s claims, arguing that the government failed to plausibly allege that the defendants were overpaid, that they knew they were overpaid, or that they conspired to keep the money.

Judge Walker rejected these arguments, holding that the government sufficiently stated plausible claims. The court found that the government sufficiently alleged that the fixed payment rates under the USFHP program were intended to serve as cost ceilings, and that actuarial errors by a government contractor may have resulted in inflated rates and overpayments. The court’s decision took into account the alleged communications among the providers regarding the overpayments and efforts to cover up the error. The case will now proceed to discovery.

The case is United States ex rel. Jane Rollinson et al. v. Brighton Marine Inc. et al., No. 2:16-cv-00447 (District Court of Maine).

Ohio and Pennsylvania Nursing Homes Settle FCA Allegations for $3.61 Million

On June 3, American Health Foundation (AHF), AHF Management Corporation, and three affiliated nursing homes agreed to pay $3.61 million to resolve allegations that they billed Medicare and Medicaid for grossly substandard skilled nursing services between 2016 and 2018.

According to the government, the three nursing homes, located in Pennsylvania and Ohio, engaged in a range of deficient practices, including:

• Failing to follow appropriate infection control protocols and maintaining adequate staffing levels.
• Housing residents in unsanitary and pest-infested conditions.
• Administering unnecessary medications, including antibiotics, antipsychotics, antianxiety, and hypnotic drugs.
• Neglecting resident dignity and safety, including subjecting residents to verbal abuse, depriving them of meaningful activities, and failing to safeguard personal possessions.
• Failing to provide needed psychiatric care.
• Persistently failing to create and maintain required resident care plans and assessments.
• Housing residents in facilities that were not safe or sanitary.

As part of the resolution, AHF and its affiliates have entered into a five-year Corporate Integrity Agreement with the US Department of Health and Human Services, Office of Inspector General. The agreement is designed to address quality of care and resident safety issues across AHF’s skilled nursing facilities.

Read the DOJ’s press release here.

New Jersey Pharmacies Resolve FCA Allegations for $1.9 Million

Five pharmacies operating in Jersey City, Bayonne, and Elizabeth, New Jersey, have agreed to pay a total of $1,935,000 to resolve allegations that they violated the FCA by submitting claims to Medicare and Medicaid for medications that were never dispensed.

The pharmacies include 2818 JFK Pharmacy LLC, 518 Summit Care Pharmacy LLC, 1850 Greenville Pharmacy LLC, 327 Alexandria Pharmacy LLC, and 516 Broadway Care Pharmacy LLC.

According to the DOJ, inventory records indicated that the pharmacies did not purchase sufficient quantities of medications from wholesalers to fill the prescriptions for which they billed Medicare and the New Jersey Medicaid Program.

Read the DOJ’s press release here.