An Oklahoma chiropractor and business owner has been sentenced to 14 years in federal prison for running a $30 million fraud scheme that billed Medicare, TRICARE and a veterans' health program for orthotic braces, glucose monitors and other medical equipment that patients never ordered or needed. Mark Loftis operated the scheme through Back Pain Home Supplies LLC, doing business as EZ Medical Supply, a company based in Drumright, Oklahoma, while he lived in Cushing.
According to KOKH, Loftis paid marketers, purported telemedicine companies and a call center to generate the fraudulent orders. Investigators said the call center persuaded elderly and disabled Americans to disclose personal information and receive unnecessary medical equipment, and Loftis and his co-conspirators then purchased sham doctors' orders for orthotic braces, continuous glucose monitors and other durable medical equipment. Telemedicine doctors and nurse practitioners generated those equipment orders without ever examining or speaking to the beneficiaries whose names ended up on the paperwork.
The scale of the billing was striking: the fraud group submitted more than $30 million in false and fraudulent claims to Medicare, TRICARE and the Civilian Health and Medical Program of the Department of Veterans Affairs, known as CHAMPVA, and was ultimately paid more than $8 million, the Department of Justice said. In one case, the group billed eight separate braces for a single beneficiary. Loftis also paid more than $1 million in illegal kickbacks, according to authorities, funneling some of that money through a shell marketing company.
How the Scheme Hid From Medicare
Trial evidence showed that Loftis and his co-conspirators concealed the true ownership and management of EZ Medical Supply from Medicare, allowing unenrolled third-party entities to route false claims through the company's billing credentials, according to the Department of Justice. That structure let outside operators reach federal reimbursement systems they weren't authorized to bill directly. The billing scheme ran for three years, and the department's account indicates Loftis kept submitting false claims even as complaints poured in from beneficiaries and their families about unsolicited medical devices arriving at their doors.
The fraud wasn't limited to back braces. The network also submitted false claims for continuous glucose monitors and other durable medical equipment that patients had neither requested nor needed, broadening the scheme's reach into diabetes management technology alongside orthotics.
A Florida Trial for an Oklahoma Business
Despite Loftis's Oklahoma base of operations, the criminal trial played out in the U.S. District Court for the Middle District of Florida. A federal jury convicted Loftis there in July on charges of conspiracy to commit health care fraud and wire fraud, following a trial that KOKH reported lasted 12 days.
He was ordered to pay more than $8 million in restitution and to forfeit more than $560,000. The court imposed the 14-year federal prison term on charges tied to healthcare fraud involving Medicare, TRICARE and veterans' health programs.
Colin M. McDonald, an official quoted in connection with the case, said simply that health care fraud does not pay. The Department of Justice said it remains committed to bringing to justice people who corrupt the health care system through illegal kickbacks, false claims and misuse of patient information. Rodney Crawford said healthcare fraud drains millions of dollars from federally funded programs, while the FBI said it remains committed to aggressively pursuing kickback schemes and other fraudulent practices. Miranda L. Bennett said fraud against federal health care programs attacks public trust and vulnerable individuals.
Pandemic Relief Funds Also at Issue
Loftis was also accused of using more than $133,000 in federal COVID-19 Provider Relief Funds. The investigation that led to his conviction and sentencing was a joint effort among four federal agencies: the HHS Office of Inspector General, the FBI Tampa Field Office, the Defense Criminal Investigative Service and the VA Office of Inspector General, underscoring how civilian, military and veterans health oversight bodies combined forces to unravel the scheme.
Part of a Nationwide Crackdown
Loftis's case lands amid a sweeping federal push against healthcare fraud. In June, the Department of Justice announced a record national enforcement action charging 455 defendants across 56 federal districts in connection with more than $6.5 billion in alleged false billings. Since the department's Health Care Fraud Strike Force program began in March 2007, it has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion.
The case also echoes other recent prosecutions of licensed chiropractors accused of running durable medical equipment schemes. In January, federal prosecutors sentenced chiropractor John Dennis Michael Peyroux of Slidell to prison and ordered him to pay over $3.2 million in restitution for a $3.3 million Medicare fraud scheme involving unrequested medical supplies.
