State Attorney General Bob Ferguson on Tuesday announced the owner of a Seattle wheelchair company has been ordered to pay $2.7 million for fraudulently billing the Medicaid program for 119 new wheelchairs, but instead delivering used wheelchairs to the poor and disabled across the state.
Last Friday, a federal bankruptcy judge in the Western District of Washington (Seattle division) ordered Michael Mann, owner of Seattle-based Wheelchairs Plus, Inc., to pay for violating the state’s Medicaid Fraud False Claims Act and Medicaid Provider Fraudulent Practices law. This civil case was initially filed in Thurston County Superior Court, but after Mann filed bankruptcy in May 2015, the state moved the case to bankruptcy court.
U.S. Bankruptcy Judge Timothy Dore also ruled that Friday’s judgment cannot be discharged in the proceedings, meaning Mann cannot avoid paying the judgment due to bankruptcy.
“It is deplorable when fraudsters take advantage of a vulnerable population for financial gain,” said Ferguson in a media release. “My office will hold healthcare providers accountable when they fail to provide adequate care and submit false bills.”
The AGO alleged that from 2009 to 2012, Mann purchased used wheelchair parts from websites such as Craigslist or from nursing home “bone yards.” Mann then cobbled together mismatched parts, including soiled pads and cushions. After reassembling chairs, he would slap on a new coat of paint and add a false serial number that identified the chair as new.
After Mann delivered the used wheelchair to a Medicaid client, he submitted a false claim to the state Medicaid program — which does not cover used wheelchairs — seeking several thousand dollars in reimbursement for a “new” chair. Mann paid approximately $600 to rebuild each chair.
Collectively, Mann unlawfully received over $550,000 in Medicaid payments he was not entitled to.
The AGO alleges Mann violated state law by: (1) Misrepresenting that the wheelchairs were new, when in fact they were used; and (2) filing a false Medicaid statement.
The $2.7 million judgment represents civil penalties, damages and prejudgment interest. Medicaid is jointly funded by the state and federal government. Washington’s Medicaid program will receive approximately half of the judgment collected from Mann. The rest is returned to the federal government.
The AGO brought a separate criminal case against Mann. He was convicted in Jan. 2015 of felony charges, including one count of first-degree theft and two counts of Medicaid false statement.
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