Arizona Couple Plead Guilty for Fraud in Case Where They Charged Healthcare for Expensive and Unneeded Wound Graft Procedures
Alexandra Gehrke and Jeffrey King pleaded guilty to defrauding medical programs of $1.2 billion for medically unnecessary procedures given to elderly and terminally ill patients. Photo credit: Facebook.
Together with co-conspirators, Gehrke and King made claims for wound grafts applied to terminally ill or elderly patients that were medically unnecessary, prosecutors say.
Gehrke and King have agreed to forfeit $410 million in funds they obtained from the fraud and will pay $605,690,110 and $614,990,420 in restitution, according to the DOJ press release. Gehrke pleaded guilty on Oct. 24, 2024, and faces 20 years in prison at her sentencing scheduled for Feb. 11. King pleaded guilty on Jan. 31 and is waiting for a sentencing date. He also faces 20 years in prison.
Operated Three Medical Companies
Gehrke owned the consulting firm Viking Medical Consultants LLC and co-owned Apex Mobile Medical LLC, where she was the Chief Executive Officer, according to the indictment. King was the managing partner and co-owner of APX Mobile Medical LLC.
In September and November 2022, Gehrke was certified by Medicare, claiming to understand the rules, laws and procedures according to federal law, as detailed in the indictment. Gehrke contracted with untrained representatives through her companies, Viking and Apex. The representatives recommended and arranged for the purchase and order of allografts from a company based out of Fort Worth, Texas.
Allografts are tissue donations from cadavers, such as bones, skin or heart valves, that are implanted in or on living patients. Often, they are medically necessary. Those provided by Gehrke and King were not, prosecutors say.
Gehrke and King also contracted with nurse practitioners through their companies, Apex and APX, to apply the allografts to the patients referred by Gehrke, King and the untrained representatives.
Paid Kickbacks to Reps Ordering Wound Grafts
Gehrke paid the representatives kickbacks with the amount of money paid depending on the size and quantity of the allografts the nurse practitioners applied to the patients, according to the indictment. The larger the size of the allografts ordered from the Fort Worth company, the more Apex and APX could bill Medicare.
Some representatives were paid hundreds of thousands of dollars a month in kickbacks, according to the indictment. Gehrke and King paid the nurse practitioners a flat rate of $500 or $1,000 for the procedures.
Sought Out Victims in Hospice Facilities, Nursing Homes
The representatives were instructed to find the patients eligible for allografts in hospice facilities, nursing homes and assisted living facilities, according to the indictment. The untrained representatives were instructed to find patients with a “wound or wounds of any stage” that they thought would “benefit from healing faster.” Once the potential patients were identified, the representative would take photos and measurements of the wounds and make copies of the patient’s insurance cards.
Gehrke directed the representatives only to order allografts that were 4x6cm or larger from the Fort Worth company, even though smaller sizes were available, according to the indictment. Gehrke also instructed the representatives to target mainly hospice facilities because that was “where most of the money was.”
Between November 2022 and May 2024, Gehrke, King and their co-conspirators claimed about $900 million from Medicare and were paid $600 from Medicare and other insurance agencies, according to the indictment. They also received $330 million in kickbacks, which they used for personal expenses.
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