Medicaid Fraud: Grand Larceny or Is Another Doctor Just Getting Played?

The recent June 3, 2011 indictment of Suresh Hemrajani, a Washington Heights doctor, by the Manhattan District Attorney’s Office, at first glance appears to be simply another Medicaid doctor accused of stealing $700,000 from Medicaid by billing and writing expensive human immunodeficiency virus (HIV) prescriptions for “patients” who did not actually have AIDS.  A closer look at the allegations, however, indicates that the defendant doctor, if culpable, is really a minor player in a familiar fraud scheme known as “playing the docs.”

The driving force in this scheme is the shadowy middlemen, who direct Medicaid recipients (need that Medicaid card!) to certain doctors with a shopping list of expensive and/or controlled drugs.  Once the prescription is obtained, the middlemen direct the “patient” to particular pharmacies where the scripts can be filled.  Once the “patient” exits the pharmacy, the middlemen will collect the drugs for shipment overseas or for sale to black market retailers.  The pharmacy bills Medicaid, and that payment makes up Dr. Hemrajani’s larceny charge on the theory that his prescriptions caused Medicaid to make the payment, despite the fact that the doctor did not share in the proceeds.  The “patient” gets a one-time payment of between $50 and $100 for his efforts and the use of his Medicaid card.  The drugs are either shipped to another country or wind up on the shelves of another pharmacy via the black market.  Theoretically, the same drug could be dispensed and billed to Medicaid numerous times.

If the charges are true, Dr. Hemrajani, facing a top count of grand larceny in the second degree punishable by up to 15 years in jail and the loss of his medical license, actually made very little money in this scheme.  His motivation could only have been increased patient traffic.  How he bills for these patients and what his medical records reflect could result in additional felonies being charged.  If his role in the conspiracy can be established, his monetary liability is likely a lot more than he actually put in his pocket.  Whether or not convicted, Dr. Hemrajani may ultimately be just another doctor that got “played.”  Due to his role and his exposure, he may end up suffering the harshest punishment, while the middlemen escape prosecution.  Perhaps they will be the next chapter in this saga.

This post was contributed by Richard Harrow.


Richard Harrow

About Richard Harrow

Rich is Of Counsel to our health and criminal law practice groups in the Albany office. In addition to focusing on Medicare, Medicaid and False Claims prosecutions and investigations, and corporate compliance, Rich works with the firm's white collar criminal defense attorneys where he represents individuals and entities in every stage of criminal and regulatory investigations and prosecutions