A couple in Arizona have pleaded guilty to submitting more than $1.2 billion in false claims to Medicare and other health insurance programs for medically unnecessary wound grafts for elderly and terminally ill patients.
According to a Jan. 31 news release by the Department of Justice, Alexandra Gehrke and Jeffrey King, alongside co-conspirators, coordinated the scheme through two companies that Ms. Gehrke operated — Apex Medical and Viking Medical Consultants. The companies contracted medically untrained "sales representatives" to identify elderly patients, including hospice patients, who had wounds at any stage and ordered amniotic wound grafts from a specific distributor.
Sales representatives were then instructed by Ms. Gehrke to order grafts over a specific size, even if the wound was smaller, to earn the higher health insurance reimbursement. She collected more than $279 million in illegal kickbacks through the distributor of the grafts in exchange for the orders. Ms. Gehrke paid the representatives tens of millions in unlawful kickbacks.
Ms. Gehrke then referred patients to the company co-owned by Mr. King, which contracted nurse practitioners to apply the grafts. Mr. King fraudulently billed Medicare and other state and private healthcare programs for the grafts. The couple instructed nurse practitioners to "suspend" their own medical judgment and apply all grafts ordered by the sales representatives, even when medically unreasonable or unnecessary. This resulted in grafts being applied to infected wounds, wounds that had already healed or wounds that were responsive to the grafts.
The couple took in more than $1.2 billion through this scheme between November 2022 and May 2024.