Elaborate Medical Equipment Fraud Billing Scheme, Defendant Sentenced,Convicted of Defrauding Medicare, Medicaid and TriCare
Jackson, TN – Following his conviction by a federal jury of conspiracy and wire fraud, 39-year-old Bryan Bailey, of Milan, Tenn. was sentenced to 84 Months Imprisonment for Defrauding Medicare, Medicaid and Tricare, followed by three years of supervised release, and a $200 special assessment. Bailey was also order to pay more than $1.9 million in restitution to Medicare, Medicaid and private insurance companies.
Bryan Bailey was convicted following more than three weeks of trial in February 2018 of both counts charging him in the indictment. His mother, Sandra Bailey, 67, of Jackson, was convicted of 16 counts, including conspiracy, health care fraud, and paying illegal kickbacks in connection with health care services. His father, Calvin Bailey, 67, of Jackson, was convicted of conspiracy.
The jury returned guilty verdicts on all 17 counts alleged in the indictment.
Evidence at trial revealed Sandra Bailey and Calvin Bailey sold durable medical equipment including power wheelchairs and back braces. From November 2009 to September 2011, they
were both employed at Jaspan Medical Systems (“JMS”), a durable medical equipment company with an office in Jackson, Tenn. Bryan Bailey, was the operations and sales manager at Jaspan from October 2009 to July 2013. Following their employment at JMS, the couple was employed by other medical supply companies in West Tennessee, Kentucky, and Mississippi. Calvin Bailey is also the former principal at Medina Elementary School in Medina, Tenn.
During the time the Baileys worked at JMS and the other companies, they received more than $1.2 million in salary and sales commissions.
While employed at JMS, the Baileys began to market wheelchairs to patients and represented them as paid fully by Medicare, and at no cost to the patients. To market the equipment, the Baileys used an extensive network of illegally paid recruiters to find eligible patients. After finding the patients, Sandra and Bryan Bailey would forge and falsify documents to make it appear that the patients qualified for the equipment. They also enlisted a local physician and nurse practitioner to order the equipment without the required physical examinations to determine if the equipment was medically necessary. To facilitate this scheme, Sandra Bailey paid illegal kickbacks to the medical providers.
Numerous patients testified that Sandra Bailey offered the equipment at no cost, and that they never saw the doctor or nurse practitioner before the Baileys delivered the back braces and power wheelchairs. Many also testified that they never used the power wheelchairs, and that the power wheelchairs were too large to be used in their homes. Even though most of the patients could walk, drive vehicles, and care for themselves without the need for a power wheelchair, the Baileys would falsify medical records to make it appear that the patients were qualified. In order to qualify the patients to receive the equipment at no cost, Bryan Bailey falsified and directed others to falsify patients’ income and expenses to make it appear that they were indigent.
“Kickbacks pervert medical decision-making by encouraging health care providers to order things that patients do not need,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of the Inspector General. “This defendant pushed the sale of expensive power wheelchairs by paying patient recruiters and others which was a blatant violation of the law.”
In 2010, Bryan Bailey expanded JMS’s sales into North Mississippi, and hired a sales representative named Dennis Sensing to sell power wheelchairs. Sensing paid illegal kickbacks
to patient recruiters to find Medicare and Medicaid patients under the direction of Bryan Bailey. Bryan Bailey received sales commissions for the power wheelchairs sold by Sensing. In order to bill Medicare and Medicaid for the equipment, Sensing forged the signature of a nurse practitioner with Bryan Bailey’s knowledge and approval. Bryan Bailey directed Sensing to falsify patients’ income and expenses to make it appear that they were indigent. Sensing sent via facsimile the forged and falsified documents to Bryan Bailey, who caused the claims to be submitted for payment.
Sensing, who previously had pleaded guilty to conspiracy to commit healthcare fraud and pay illegal kickbacks, testified in the government’s case.
Sandra Bailey and Calvin Bailey are scheduled to be sentenced on August 3, 2018 before Chief Judge Anderson.
