Medical equipment sales jobs are highly sought-after. And for good reason. The pay is great and the perks are outstanding. But what makes these types of jobs so valuable? The answer is simple, really: while medical equipment is very much needed, it’s also quite expensive, making it very valuable.
The fact that medical equipment and devices are so valuable means that there’s money to be made whether it’s by a reputable salesforce or an increasing number of scam artists. Scams and other types of fraud are nothing new. However, recent years have seen some truly elaborate schemes as well as concerted efforts aimed specifically at the medical equipment industry.
Below are a few of the common types of fraud seen in today’s world of medical equipment including a couple of classic scams.
University Students/Researchers Scam
A widespread new scam has appeared targeting the imaging and medical supply industry, posing significant risk to small and mid-sized companies. Using fraudulent email addresses and purchase orders, individuals claiming to act on behalf of university research departments will arrange for shipment of medical equipment to a United States location. Upon delivery, the equipment is immediately reshipped to Africa, typically Nigeria (24×7 Magazine).
For this scam, an email address is used that at first glance, appears to be from a legitimate college (.edu) domain, such as joe.smith@ucla.edu.com or joe.smith@ucla.edu.net. However, delivery locations differ from the university’s actual physical location, and communication is typically conducted exclusively via email.
Small to mid-sized businesses are generally targeted more often: “A lot of times, smaller businesses take on more risk because they want the business,” claimed Sterling Peloso, CEO of Ultra Solutions, a company that specializes in selling refurbished ultrasound equipment. These companies are typically looser when it comes to vetting potential buyers and unfortunately, they are also more likely to take a major financial hit in the event of fraud.
According Peloso, the FBI told him this particular hoax has already succeeded with at least 185 businesses, resulting in losses in the millions to tens of millions of dollars (24×7 Magazine).
Power Wheelchair Fraud
Power wheelchair fraud is something that the government at both the state and federal level have been fighting for well over a decade but still exists, unfortunately. “Spending on power wheelchairs has increased nearly 450 percent over the last four years, an unprecedented growth in this benefit,” said Centers for Medicare and Medicaid Services Administrator Tom Scully in an archived HomeCare Magazine article regarding power wheelchair fraud. He added, “While many of these wheelchairs are provided by ethical suppliers and go to beneficiaries in need, we know that a great number of unscrupulous suppliers are promising free wheelchairs to beneficiaries who don’t need them. We are taking immediate action to stop these scams.”
This type of billing fraud costs federal programs like Medicare and Medicaid well into the billions of dollars annually, meaning that taxpayers are pretty much left to foot the bill. How does it work? Providers and doctors work together to participate in this type of scheme, attempting to bill Medicare and/or Medicaid programs for unnecessary power wheelchairs for their patients.
Fortunately, new laws have been enacted to curb and slow the abuse of wheelchair benefits. Most of these new laws and procedures focus on more aggressive scrutiny when examining individual patient cases as well as requiring that physicians actually see and examine patients before prescribing a power wheelchair.
Kickbacks
Medical equipment fraud also occurs when companies align themselves with physicians in a variety of kickback schemes. These relationships could include hiring physicians as “consultants” to help in the designing, testing, or developing of new products. These schemes can not only involve physicians, but also hospitals and hospital systems. They’ve also been around for years.
“The medical device area is particularly susceptible to kickbacks for physicians because there are so many different types of devices that there is more room for physicians’ discretionary decisions about whether or not to prescribe or recommend certain devices for their patients,” said Sara Lord, a partner at Arnall Golden Gregory and former Justice Department attorney in a November 2016 interview with Healthcare Dive.
She noted, for example, that incentives for doctors to use products, particularly new products, very rarely include direct payments for actually using a device. Instead, device companies or distributors may ask a prominent physician to try their product and then offer to pay them for spreading the word about it.
However, it doesn’t always work out for scammers. In a recent case, St. Jude Medical, Inc. settled and paid $16 million as the result of whistleblower allegations that it violated the anti-kickback statute when it used post-market studies as vehicles to pay participating physicians kickbacks to implant St. Jude pacemakers and ICDs (Nolan Auerbach & White Law Firm).
With so many scams in and around the medical equipment industry, how do keep your clients safe and happy? You must do your part to keep them informed, educating them on what to look for and how to identify a potential scam. Jobs in the medical equipment sales field provide an opportunity to not only make a great living, but to be a watchdog and trusted advocate as well.
