Husband and Wife Plead Guilty in Massive Healthcare Fraud

There are numerous unscrupulous providers in the healthcare industry and countless ways to skim money from the system that pays medical professionals and suppliers. When someone is elderly or suffering from a terminal illness and is told that they require a wound graft, they and their families likely do not pay much attention to the size of the graft of they receive. However, the use of unnecessary and oversized grafts led to one of the biggest healthcare fraud cases ever. 

An Arizona couple pleaded guilty to charges arising from a scheme that caused over $1.2 billion in fraudulent claims to be filed with Medicare and other government health insurance programs, including those that serve military families and veterans. Alexandra Gehrke and Jeffrey King, a married couple living in Phoenix, admitted to exploiting vulnerable patients so that they could collect payment for high-cost wound grafts that lacked any medical justification. According to court documents, the couple conspired with others to carry out the massive fraud through two companies operated by Gehrke: Apex Medical LLC and Viking Medical Consultants LLC. These companies contracted with medically untrained “sales representatives” to locate senior patients, including those receiving hospice care, who had any type of wound. 

The sales representatives were instructed to order amniotic wound grafts from a specific distributor, regardless of whether the grafts were medically necessary. To maximize health insurance reimbursements, Gehrke directed the sales representatives to order grafts that measured four centimeters by six centimeters or larger, even if the patients’ wounds were much smaller. This practice not only inflated costs but also subjected vulnerable patients to unnecessary medical procedures. The couple financially incentivized the sales representatives to comply with these instructions, further fueling the fraudulent scheme.  

As part of their plea agreements, each defendant agreed to pay more than $600 million in restitution and the couple surrendered more than $400 million in funds that they had received as a result of their misrepresentations. Both Gehrke and King face a maximum of 20 years in prison. 

This case shows that the damage stemming from even one couple’s Medicare fraud can be devastating. Should you know about improper billing practices can result in severe legal and financial consequences, plus a potential monetary award for acting as a whistleblower. You can reach out to Kardell Law Group to discuss your situation and legal options with an accomplished attorney.