March 18, 2025 | JacobiJournal.com – Medicare fraud continues to draw federal scrutiny, with a major case resulting in a guilty plea from a healthcare software executive. A Kansas-based vice president of a healthcare software company pleaded guilty to conspiracy to commit healthcare fraud, admitting to operating an internet-based platform that defrauded Medicare and other federal programs of over $1 billion.
Massive Fraud Scheme Through Internet Platform
Healthcare Software Firm” Gregory Schreck, from Johnson County, Kansas, admitted that he and his co-conspirators targeted hundreds of thousands of Medicare beneficiaries through misleading mailers, TV ads, and offshore call centers. These tactics lured beneficiaries into providing personal information and agreeing to receive medically unnecessary orthotic braces, pain creams, and other items.
Schreck and his team operated DMERx, an internet platform that generated false doctors’ orders for these items. He connected pharmacies, durable medical equipment (DME) suppliers, and marketers with telemedicine companies willing to accept illegal kickbacks in exchange for signed orders. These fraudulent orders were then transmitted via the DMERx platform, resulting in Medicare and other insurers paying more than $360 million in false claims.
False Medical Orders and Illegal Kickbacks
Court documents revealed that the orders generated by DMERx falsely claimed that doctors had examined and treated Medicare beneficiaries. In reality, doctors were paid by telemedicine companies to sign off on orders after brief or non-existent interactions with the beneficiaries. DME suppliers and pharmacies then billed Medicare based on these fraudulent claims, leading to massive losses for the federal healthcare system.
Guilty Plea and Possible Sentencing
Schreck pleaded guilty to conspiracy to commit healthcare fraud and faces a maximum penalty of 10 years in prison. His sentencing date will be scheduled later, with a federal district court judge determining the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Agencies Leading the Investigation
The investigation was led by:
- HHS-OIG – Miami Regional Office
- FBI – Miami Field Office
- VA-OIG – Southeast Field Office
- DCIS – Southeast Field Office
Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, along with several other high-ranking law enforcement officials, announced the guilty plea.
Fighting Fraud: Protecting Medicare
The Justice Department, in collaboration with multiple federal agencies, remains committed to combating fraud that undermines the integrity of Medicare and other federal healthcare programs.
For more details on how Medicare combats fraud, visit HHS-OIG’s official fraud prevention page.
FAQs: Medicare Fraud Software Case
What is the Medicare fraud software case about?
The Medicare fraud software case involves a platform called DMERx, used to generate false medical orders and defraud federal healthcare programs.
How much was lost in the Medicare fraud case?
The fraudulent scheme generated more than $360 million in false Medicare claims, with overall losses from the conspiracy exceeding $1 billion.
What penalties does the executive face in the case?
The executive pleaded guilty and faces up to 10 years in prison, with sentencing based on federal guidelines and statutory factors.
Which agencies led the Medicare fraud software case investigation?
Agencies included HHS-OIG, FBI, VA-OIG, DCIS, and the Justice Department’s Criminal Division.
Stay informed on major healthcare fraud cases and federal enforcement actions. Subscribe to JacobiJournal.com for expert legal coverage and real-time updates.