Video Doctor Network: The Admitted Sale of Brace Orders

The Video Doctor Network durable medical equipment fraud case exposed a business that sold medically unnecessary brace orders: its chief executive admitted in his criminal guilty plea that suppliers used those orders to submit more than $424 million in false Medicare claims. Medicare paid the suppliers more than $200 million. The network paid healthcare providers to produce the orders and received kickbacks for passing them along. For someone inside a telemedicine business, the question is familiar: who was paying for the medical decision, and what were they buying?

The network comprised Video Doctor USA and Telemed Health Group LLC, doing business as AffordADoc. In the Justice Department’s September 6, 2019 account of the guilty plea, one of the network’s owners and its chief executive admitted conspiracies involving healthcare kickbacks and money laundering. His admissions explain both sides of the business: how a signed brace order reached a supplier, and how the supplier’s money reached the network while looking like something else.

How Does DME Fraud Work?

In this case, durable medical equipment fraud worked by buying medical orders and selling them to suppliers that billed Medicare. The chief executive’s plea described an international telemarketing network with call centers in the Philippines and Latin America. The callers brought elderly or disabled beneficiaries into the scheme, and the network paid health care providers to order medically unnecessary orthotic braces.

Many orders followed only a short telephone conversation with a provider who had no prior doctor-patient relationship with the beneficiary. The network then transferred the orders to brace suppliers. The medical encounter produced the document that the next business needed to get paid.

Medicare would not pay claims generated through kickbacks and bribes. An order carried the clinician’s authority into a claim submitted by a different company.

That division helps explain why the order itself has a price. In its July 2022 telemedicine fraud alert, the Department of Health and Human Services’ Office of Inspector General described arrangements in which a telemedicine company sells practitioner-generated orders to other businesses. It identified insufficient patient contact and compensation tied to order volume among the features of suspect arrangements. The Video Doctor Network plea shows that commercial exchange in practice: payment bought an order, and the order supported a Medicare bill.

The Money Circuit Behind the Membership Story

In his guilty plea, the chief executive admitted that the network presented kickback revenue as money paid by patients. Investors heard that beneficiaries enrolled in a membership program, paid for telemedicine consultations and supported a business earning $10 million per year with 20% profit. He admitted those representations were false. The revenue came from kickbacks and bribes paid by patient recruiters, pharmacies, brace suppliers and others. He also admitted knowing that the network’s receipt of those payments violated the Anti-Kickback Statute.

The same guilty-plea account traces the kickbacks from PCS CC LLC in the United States to Droneza Consulting in the Dominican Republic. The conspirators then moved more than $9.8 million from Droneza to AffordADoc’s U.S. accounts to conceal the payments for brace orders.

The indictment identifies PCS CC as Procall, a call center company that purported to operate throughout Latin America. The supposed customer was a patient buying access to care. The admitted source of revenue was a business paying for orders it could use to bill insurance.

The chief executive also admitted using companies and accounts opened in other people’s names, including foreign accounts, to hide the kickbacks. He admitted false statements to financial institutions and false representations that he and others had no influence over foreign bank accounts. The ownership paperwork and the movement of money told different stories.

Contracts and Invoices Gave the Payments Another Name

The April 2019 criminal indictment alleged that sham contracts and false invoices helped disguise the order business. Payments appeared under the labels “marketing” or “business process outsourcing.” The indictment separately alleged that the defendants falsified or altered equipment orders and other records to support Medicare claims.

Those allegations connect the accounting records to the clinical paperwork. An invoice described a service. An order supplied a medical reason to furnish a brace.

The indictment also identified wires to Video Doctor USA, Latin American Call Centers and Procall as alleged kickback payments. For an employee who handled billing or vendor accounts, the relevant business relationship could appear under a call center’s name as well as a telemedicine company’s.

The Marketing Executive’s Part in the Order Business

The network’s vice president of marketing was charged with participating in the exchange of money, beneficiary information and signed orders. The joint indictment placed the executive in the process that brought patient information to the network’s providers for signatures and alleged that he helped falsify or alter supporting records.

It described the signed order as the connection to suppliers’ claims:

The Justice Department’s August 10, 2021 announcement in the joint case confirms that the marketing executive had also pleaded guilty. The order-transfer allegations show why this role mattered: the marketing side connected the people who could produce signed orders with the businesses that could turn them into Medicare claims.

The same announcement describes a later criminal indictment against the network’s other owner. That indictment alleged more than $784 million in false Medicare claims and more than $247 million paid, with kickbacks exchanged for orders for medications as well as braces. Those figures describe the later charges against that owner, rather than the chief executive’s earlier admissions.

The Same Paid-Order Pattern in Other Brace Cases

The Video Doctor Network case belonged to the nationwide April 2019 enforcement action. In its announcement of the criminal charges, the Justice Department alleged that some defendants used an international call center to advertise free or low-cost braces and persuade beneficiaries to accept numerous braces regardless of medical need.

The paid-order pattern also appears in a later civil case, where the payment passed through a staffing company before reaching the physician. In the March 2024 settlement involving Jackson & Coker LocumTenens, the government alleged that Nationwide Health Advocates used telemarketers to obtain beneficiary information and generate orders and supporting documents. A physician retained through the staffing company electronically signed the orders, nearly all of which he approved, without speaking to the beneficiaries or treating them. Nationwide paid the staffing company, which paid the physician for each order reviewed.

The alleged paperwork made it appear that the physician was treating a particular medical problem and ordering equipment or testing as part of that treatment. A real clinician’s signature gave a marketer-generated document the appearance of a treatment decision. That is the part of the process a clinician, staffing employee or order reviewer may recognize.

What an Insider May Hold

An insider may know why the order was signed, why a vendor was paid or why revenue was described as patient membership fees. The Video Doctor Network plea and indictment connect those decisions through patient information, provider payments, signed orders, supplier claims and accounts held in other names.

An order reviewer may see the information the clinician actually received. A supplier employee may see the order that arrived and the claim it supported. An accounting employee may know which business sent the money and what the invoice said it purchased. Each view can explain a connection that the finished claim leaves out. We work with that knowledge to identify the conduct, the decisions behind it and the Medicare payments it reached.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Payment Bought

If you saw brace orders traded, patient records manufactured or supplier payments disguised as other revenue, speak to one of our whistleblower experts about how the orders were bought. We build the case with you and bring in durable medical equipment fraud whistleblower lawyers who understand paid referrals and telemedicine order networks. We stay beside you from that first conversation through the pursuit of a recovery.