Man charged in $148M Medicare and Medicaid fraud scheme

By SDCN Editor

Baton Rouge, LA–A federal grand jury in Baton Rouge, Louisiana, returned an indictment Thursday charging a Louisiana man for his role in a scheme to defraud Medicare and Medicaid of over $148 million in medically unnecessary definitive urine drug testing services.   

According to court documents, Brad Paul Schaeffer, 48, of Zachary, was a co-owner and chief executive officer of MedComp Sciences LLC (MedComp), a diagnostic laboratory located in Zachary, La. From approximately January 2013 through approximately August 2022, MedComp, at the direction of Schaeffer, allegedly billed Medicare and Medicaid for definitive testing of at least 15 substances in urine specimens it received, regardless of the patient’s treatment plan and history, or the request of the referring provider. To perpetuate the fraud, Schaeffer, through MedComp, allegedly took several actions, among them, writing off patient co-pays, directing MedComp staff to fill out and submit order forms on providers’ “behalf,” concealing the true nature, permissibility, and extent of testing from providers, orchestrating a pass-through billing scheme using hospitals, and paying kickbacks to physicians disguised as laboratory ownership interests. Schaeffer then allegedly used the fraudulent proceeds for his benefit, including spending thousands of dollars to renovate a pool and a pool house in his backyard, and to restore a truck.  

Schaeffer is charged with one count of conspiracy to commit healthcare fraud, five counts of healthcare fraud, and three counts of engaging in unlawful monetary transactions. If convicted, he faces a maximum penalty of 10 years in prison on each count.

Acting Assistant Attorney General Nicole Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Ronald C. Gathe Jr. for the Middle District of Louisiana, Special Agent in Charge Jason Meadows of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Special Agent in Charge Douglas Williams Jr. of the FBI New Orleans Field Office, and Louisiana Attorney General Jeff Landry, announced on Thursday.

HHS-OIG, the FBI, and the Louisiana Medicaid Fraud Control Unit are investigating the case.

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