A Kansas man who ran an internet platform built to churn out fake doctors’ orders was sentenced Thursday to 19 years in prison for a scheme that billed Medicare and other federal health programs more than $1 billion, the Department of Justice said. Brett Blackman, 43, of Johnson County, Kansas, owned and ran HealthSplash, which bought the platform, DMERx, in September 2017.
How the scheme worked
Blackman and his co-conspirators pushed hundreds of thousands of beneficiaries across the country to accept medically unnecessary orthotic braces and other items. Telemedicine doctors then signed bogus orders for them. DMERx linked pharmacies, equipment suppliers and marketers with telemedicine companies that accepted kickbacks in exchange for signed orders, and Blackman and his partners took a cut.
The orders claimed doctors had examined and treated patients. In fact the doctors were paid to sign, often with no contact at all. At trial, an undercover agent posing as a beneficiary showed the chain: a foreign call center pressed for several braces, then a doctor signed orders on DMERx. One order listed tests that can only be done in person, though the doctor never spoke to the agent.
The numbers are large. Suppliers and pharmacies billed Medicare and other insurers over $1 billion, and the insurers paid more than $450 million. Medicare was billed for braces for more than 346,000 beneficiaries, about four braces each on average. Over 1,200 beneficiaries were billed for at least 21 orthotics apiece.
The group hid it with sham contracts and by editing doctors’ orders to avoid Medicare audits, including by deleting references to telemedicine.
The verdict and the response
A jury convicted Blackman in April 2026, after a 23-day trial, of conspiracy to commit health care fraud and wire fraud, conspiracy to pay and receive kickbacks, and conspiracy to defraud the United States. Restitution and forfeiture will be set later. His co-defendant Gary Cox got 15 years in December 2025.
Assistant Attorney General Colin M. McDonald, of the Justice Department’s National Fraud Enforcement Division, called it one of the largest telemedicine fraud schemes ever. Officials from the VA and HHS inspectors general, the FBI’s Miami office and the Defense Department’s criminal investigators said exploitation of federal health programs will be prosecuted. The Fraud Division itself dates only to April 7, and it supports a task force chaired by Vice President JD Vance.
The strategic point is that the gap lies in the billing system, not in any one provider. A Justice Department strike force program has charged more than 6,200 defendants since 2007 who billed federal and private insurers over $45 billion.
A second case, same pattern
In a separate case, former California teacher Jeanett Valenzuela Ayub pleaded guilty to money laundering conspiracy over a $51 million scheme. She and her co-conspirators were paid about $20 million, laundered at least $14 million and paid $3.7 million in kickbacks to sham marketing companies. Those firms supplied prescriptions signed by physicians with no real patient relationship, for braces that beneficiaries never asked for, and many were found in unopened packaging. After her brother Fernando was arrested in December 2024, she fled to Tijuana. She was detained in August 2025 in the Dominican Republic and returned by US Marshals.
Why detection lags
The full cost of Medicare fraud is hard to know, since not all fraud is caught and not every suspect claim is fraudulent. The Office of Management and Budget put improper payments at $47.9 billion in 2010, though some later proved valid, against total Medicare spending of $528 billion by the Congressional Budget Office. Common tactics include phantom billing, upcoding, kickbacks and self-referrals. A 2018 CMS rule meant to limit upcoding was vacated by a judge and appealed in 2019.
Sources
- Kansas man going to prison for $1B Medicare fraud scheme
- Medicare fraud
- Teacher pleads guilty in $51M Medicare fraud scheme; CMS to ask states to revalidate “high-risk” Medicaid providers; AI model predicts cancer survival from single-cell tumor model – Morning Medical Update | Medical Economics
Photo: Alejandro (CC0)
