Medical Supply Owner Gets 14 Years After Sham Telemedicine Orders Drove $30 Million in False Medical Equipment Claims

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What it means for coverage before open enrollment. Medical Supply Owner Gets 14 Years After Sham Telemedicine Orders Drove $30 Million in False Medical Equipment ClaimsAn Oklahoma supply owner got 14 years for $30 million in false claims built on telemedicine orders from clinicians who never saw patients. Covid – 19 FDA Proposes Requiring Companies to Report Food Additives That Now Reach Grocery Shelves Without Federal ReviewFDA has released its proposed GRAS rule requiring companies to notify the agency about food additives. Here is what the proposal does and does not do. Federal Regulators Warn Some Hair Dryer Brushes Lack the Part That Stops ElectrocutionCPSC warns hair dryer brushes sold on Walmart.com and TikTok Shop lack immersion protection. The seller has not agreed to a recall or refund. 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The scheme relied on equipment orders signed by telemedicine doctors and nurse practitioners who never examined the patients and often never spoke with them, according to prosecutors. Many of the people listed on those orders were older adults and people with disabilities who did not want or need the equipment.

The case matters well beyond Oklahoma. Every older adult, veteran, or military family member with federal coverage is a potential target of the same playbook. Unneeded orders billed in a person’s name can also make it harder to get coverage for equipment they truly need later, according to federal investigators.

A federal jury in the Middle District of Florida convicted Loftis on July 21 of conspiracy to commit health care fraud and wire fraud after a 12-day trial, the DOJ said in its conviction announcement. His company, Back Pain Home Supplies, which did business as EZ Medical Supply, was based in Drumright, Oklahoma. Assistant Deputy Chief Catherine Wagner and Trial Attorney Raymond Beckering III of the Justice Department’s Health Care Fraud Section tried the case.

Prosecutors said Loftis paid more than $1 million in illegal kickbacks, including through a shell marketing company, to marketers, purported telemedicine companies and a call center. Those marketers persuaded older and disabled people to share personal and insurance information and accept equipment such as orthotic braces and continuous glucose monitors.

The co-conspirators then bought signed orders for that equipment from telemedicine clinicians who had no real relationship with the patients. In one example cited by prosecutors, eight braces were billed for a single beneficiary at once. Of the more than $30 million billed, programs paid about $8 million.

Loftis also hid from Medicare who truly owned and managed the company, and that other unenrolled suppliers were billing through it, according to the DOJ. He kept the scheme going for about three years despite steady complaints from beneficiaries and relatives, including families of parents living with dementia and Alzheimer’s disease.

“The defendant turned private medical data into a pipeline for personal profit,” Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division said after the verdict.

Fraud like this is not victimless for the patients whose names are used. The HHS Office of Inspector General warns that if unneeded braces are billed to Medicare, “Medicare may deny a brace that the beneficiary needs in the future.”

Federal auditors have flagged braces as a weak spot for years. A 2024 OIG review found Medicare paid about $5.3 billion for orthotic braces from 2014 through 2020. It identified orders from providers with no treating relationship and suppliers using banned solicitation, and warned of potential harm to enrollees.

Those most at risk include older adults living alone, people with memory loss, veterans enrolled in CHAMPVA and military families on TRICARE. Caregivers who manage a parent’s mail and benefits are often the first to spot unexpected boxes or unfamiliar charges.

“Healthcare fraud drains millions of dollars from federally funded programs, and we all pay the price,” said Rodney Crawford, special agent in charge of the FBI’s Tampa field office. The case was investigated by HHS-OIG, the FBI, the Defense Criminal Investigative Service and the VA Office of Inspector General.

The restitution order of more than $8 million roughly matches what the programs actually paid on the false claims, money that came from the same federal funds that cover care for older adults, service members and veterans.

None of this means telehealth itself is unsafe. Many patients use video and phone visits with their own clinicians to manage chronic conditions, refill prescriptions, and avoid long drives. The problem in this case was the use of telemedicine as a cover for orders that no real clinician-patient relationship supported.

Federal investigators list clear red flags. These include an unsolicited call or ad offering a free brace covered by Medicare, equipment arriving without a doctor’s order, and anyone other than your own doctor’s office asking for your Medicare number. A real telehealth visit is usually one you scheduled, with a clinician who reviews your history and explains why equipment is needed.

Beneficiaries and caregivers can take a few simple steps. Hang up on unsolicited equipment offers and never share a Medicare, TRICARE, or VA number with callers. Refuse or return any item your own doctor did not order, and note the sender’s name and the date. Review Medicare statements or plan summaries for items you never received.

Suspected fraud can be reported to the HHS OIG hotline at 1-800-447-8477 or online at tips.hhs.gov. Anyone who believes their medical identity was misused should also ask their doctor to review their records for errors.

The DOJ has not announced charges against the individual clinicians who signed the orders in this case. MedicalDaily will update this story if prosecutors release more information about co-conspirators or any appeal.

Mark Loftis, 39, of Cushing, Oklahoma, was sentenced to 14 years in prison for conspiracy to commit health care fraud and wire fraud tied to more than $30 million in false claims.

How did the telemedicine part of the scheme work?

Prosecutors said co-conspirators bought equipment orders signed by telemedicine doctors and nurse practitioners who never examined the patients and often never spoke with them.

Medicare, TRICARE and CHAMPVA were billed for orthotic braces, continuous glucose monitors and other equipment.

Can fraud billed in my name affect my coverage?

Yes. HHS-OIG warns that if unneeded braces are billed to Medicare, Medicare may deny a brace you actually need later.

What are signs of a brace or equipment scam?

Unsolicited calls offering free braces, equipment arriving without a doctor’s order, and strangers asking for your Medicare number are common warning signs.

What should I do if I receive equipment I did not order?

Refuse or return it, record the sender and date, and report it to the HHS OIG hotline at 1-800-447-8477 or tips.hhs.gov.

No. Legitimate telehealth with your own clinicians is widely used and safe. The concern is orders from clinicians who have no real relationship with the patient.