New Horizons Durable Medical Equipment: Buying Doctors’ Orders, Calling It Marketing

New Horizons Durable Medical Equipment and three other orthotic brace suppliers collected approximately $6.5 million on approximately $12.5 million in Medicare claims for unnecessary braces ordered through illegal kickbacks, according to the Justice Department’s account of the criminal trial. The owners bought doctors’ orders and signed sham agreements calling the payments marketing expenses. For someone inside a healthcare supplier’s billing or marketing operation, the important connection is between the service named in the agreement and the orders arriving for Medicare billing.

Three co-owners jointly operated New Horizons, Striffin Medical Supply, 4B Ortho Supply and Grace Professional DME in Texas and Arkansas. The orthotic brace fraud scheme ran from January 2017 through April 2019.

On May 16, 2022, a federal jury in Dallas convicted the owners of conspiracy to defraud the United States and to offer and pay illegal health care kickbacks, along with seven violations of the Anti-Kickback Statute.

Four Suppliers Buying Doctors’ Orders

The trial evidence connected the four suppliers through common ownership, unnecessary braces and orders obtained for kickbacks. An employee looking only at the supplier submitting a claim may see the last part of a transaction that began with a payment to a purported marketing company.

The thing being purchased was the order that could support a Medicare claim. Calling the expense marketing obscured that transaction inside ordinary business paperwork. An agreement describing marketing can tell a very different story from the orders the supplier actually receives for its money.

Marketing and Outsourced Business Services at New Horizons

The Texas Attorney General’s July 31, 2023 announcement in the New Horizons case describes how the co-owner obtained patients. The agency said he offered and paid kickbacks to marketers and disguised the payments as marketing services and outsourced business services.

That account also said the co-owner submitted false claims to Medicare and Medicaid for orthopedic equipment that was never provided, was not medically necessary and was not authorized by a physician.

A Large Brace Market

In its May 2024 review of off-the-shelf braces, the Department of Health and Human Services’ Office of Inspector General reported that Medicare paid approximately $5.3 billion for orthotic braces from 2014 through 2020.

The Same Order Purchase in a Civil Case

In its complaint against AZ Diabetic Supply, the government alleged that the supplier paid LPI $400 per durable medical equipment prescription.

What Evidence Is Needed to Report Medicare Fraud?

In a purchased-order case, the useful evidence connects what the supplier paid, what it received and what it billed. We work with insiders to understand how the marketing agreement, the doctors’ orders, the payments and the Medicare claims fit together. The Dallas trial showed why the contract’s description alone cannot tell that story.

A worker responsible for marketing payments may know what the supplier expected in return. Someone handling incoming orders may know who sent them and how they arrived. A billing employee may know which orders became claims. Those are different views of the same transaction, and we help connect your view to the conduct behind the bill.

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

You Know What the Marketing Payment Bought

If you saw a supplier paying for doctors’ orders while calling the expense marketing, tell our whistleblower experts what the business was buying. We build your case around that inside knowledge, bring in durable medical equipment fraud whistleblower lawyers who understand purchased-order schemes, and stay beside you throughout the case.