Healthcare Software VP Pleads Guilty in $1 Billion Medicare Fraud Scheme

February 26, 2025 | JacobiJournal.com — Healthcare Software VP Pleads Guilty: A Kansas man has pleaded guilty to orchestrating a massive Medicare fraud scheme that scammed the government out of over $1 billion, officials said.

The Medicare fraud scheme orchestrated by Gregory Schreck involved a complex network of software platforms, telemedicine providers, and suppliers that exploited vulnerabilities in the healthcare system. By generating fraudulent medical orders and billing Medicare for unnecessary products, the scheme funneled hundreds of millions of dollars to the conspirators, highlighting the scale and sophistication of modern healthcare fraud.

How the Fraud Worked

Healthcare Software VP Pleads Guilty: Gregory Schreck, a former vice president at a healthcare software company, helped run DMERx, an internet-based platform that generated fraudulent doctors’ orders for medical braces, pain creams, and other supplies.

To find patients, Schreck and his co-conspirators used misleading ads, direct mail, and offshore call centers. They convinced Medicare beneficiaries to share personal details and accept unnecessary medical products.

Bribery and Fake Medical Orders

Rather than conduct real medical evaluations, DMERx partnered with telemedicine companies willing to accept bribes. Doctors signed orders without seeing patients, often based on a brief call—or no interaction at all.

Schreck’s team then sold these fake orders to DME suppliers, pharmacies, and telemarketers, who paid kickbacks for the documents. These businesses later billed Medicare and other insurers, collecting more than $360 million in fraudulent claims.

Legal Consequences

Schreck pleaded guilty to conspiracy to commit healthcare fraud. He now faces up to 10 years in prison. A federal judge will decide his sentence based on legal guidelines and case details.

Ongoing Investigation

The FBI, HHS-OIG, VA-OIG, and DCIS continue investigating the case.

Read the full DOJ statement here.

FAQs: About the Medicare Fraud Scheme

What was the Medicare fraud scheme involving DMERx?

The scheme used a software platform to create fraudulent doctors’ orders for braces, creams, and medical supplies, which were then billed to Medicare and insurers.

How did the Medicare fraud scheme recruit patients?

Fraudsters used ads, mailers, and offshore call centers to persuade Medicare beneficiaries to share personal information and accept unnecessary medical products.

What role did telemedicine play in the Medicare fraud scheme?

Telemedicine providers were bribed to approve medical orders without proper evaluations, allowing fraudulent suppliers to bill Medicare for services never rendered.

What penalties does the healthcare software VP face in the Medicare fraud scheme?

Gregory Schreck pleaded guilty to conspiracy to commit healthcare fraud and faces up to 10 years in prison, with sentencing to be determined by a federal judge.

Who is most responsible for Medicaid fraud?

While multiple parties can be involved, individuals in leadership positions—such as executives, managers, or healthcare providers—who orchestrate schemes or approve fraudulent billing are often held most responsible. In this case, Gregory Schreck, as a VP at a healthcare software company, played a central role in the $1 billion Medicare fraud scheme.

How can patients protect themselves from Medicare fraud?

Patients should verify medical orders and prescriptions, question unsolicited products or services, and report suspicious calls or mailings to Medicare or the HHS-OIG hotline to help prevent exploitation.

Who commits the most healthcare fraud?

Healthcare fraud is most commonly committed by individuals or groups with access to the billing or claims process, including executives, healthcare providers, office managers, and suppliers. Cases often involve coordination between insiders and external parties to submit false claims, as seen in the Gregory Schreck Medicare fraud scheme.

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