Hearing Aid Salesmen Convicted of Committing Health Care Fraud

A Macomb County hearing aid dealer pleaded guilty yesterday in federal court in Detroit on charges of Conspiracy to Commit Health Care Fraud, United States Attorney Matthew Schneider announced today.  This follows the conviction on the same charge on March 18, 2020, of a hearing aid salesman who worked for the dealer.

Schneider was joined in the announcement by Special Agent in Charge Steven M. D’Antuono of the FBI’s Detroit Field Office, Special Agent in Charge Irene Lindlow of the U.S. Department of Labor Office of Inspector General, Chicago Region (DOL-OIG), and Regional Director L. Joe Rivers, U.S. Department of Labor Employee Benefits Security Administration, Cincinnati Regional Office (DOL-EBSA).

Rasko “Ron” Djordjevic, 44, and Milija “Mike” Perkovic, 28, each pleaded guilty to one count charged in an Indictment, involving a conspiracy to commit health care fraud.  The evidence revealed that from February 2015 to April 2017, Djordjevic owned and operated Sterling Hearing Care, Inc., which was marketed as a hearing aid business with multiple locations in Southeast Michigan. Perkovic, who is Djordjevic’s brother in law, worked as a salesman conducting hearing evaluations and selling hearing aids under Djordjevic’s direction.

During that time, Djordjevic and Perkovic executed a scheme to defraud Blue Cross Blue Shield into paying fraudulent claims of more than $600,000 for hearing aid products and services.

Blue Cross had certain requirements before it would pay a claim for a hearing aid device. At times, Djordjevic and Perkovic caused Blue Cross to be billed for hearing aids and services that were not provided or were unauthorized, including billing Blue Cross for two hearing aids when only one was provided, or billing Blue Cross for hearing aids that were not ordered or provided to customers who had come in for a “free” hearing test.

At times, Djordjevic and Perkovic sold hearing aids and services to customers that were not medically necessary, including customers who had no or only slight hearing loss.

Also, Djordjevic and Perkovic provided hearing aids and services that were based on fraudulent practices. For example, they: submitted claims to Blue Cross under a spouse’s insurance policy for products not provided to that spouse and used altered medical clearances from former customers to make it look like the new customer had a medical clearance. Perkovic falsely claimed, with Djordjevic’s knowledge, that he was a doctor or audiologist and used fake x-ray photographs from the internet to show customers that they had ear damage.

Moreover, Djordjevic defrauded another health insurance company, American Hearing Benefits, out of more than $132,000. AHB contracts with companies, including AudioNet, which covers active and retired UAW members, to provide discounted hearing aid products and services. AHB required hearing aid dealers such as Sterling Hearing Care to have an AHB-credentialed audiologist on staff, who would certify the customer’s need, to bill for products and services. Djordjevic did not comply with AHB’s requirement, and instead fabricated documents that he submitted for reimbursement, including certifying that a particular audiologist had examined a customer when in fact that audiologist had not done so.

“Our office has no tolerance for health care providers that deliberately mislead customers in order to sell a medical product or service and then bill insurance companies for services and products not delivered,” stated United States Attorney Schneider.  “It is especially troublesome when a provider deals with elderly customers that may be particularly vulnerable to scams. Trust your instincts and never be afraid to seek a second opinion.”

“These defendants took advantage of the trust patients have in their health care providers to provide medically unnecessary services and to increase their profits,” said Steven M. D’Antuono, Special Agent in Charge of the FBI in Michigan. “That the patients were largely elderly makes the betrayal even greater. The FBI and our partners will vigorously investigate anyone who seeks to take advantage of our elderly population through health care fraud or any other means.”

“Djordjevic and Perkovic defrauded health benefit programs, including union plans, by falsely billing for hearing devices and services that were not provided, unnecessary, or based on fraudulent marketing practices.  By defrauding the health plans, Djordjevic and Perkovic put illegal profits above the best interest of patients.  We will continue to work with our law enforcement partners to protect the integrity of labor unions and their benefit plans,” said Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

“Criminal acts like these directly impact participants in health benefit plans by compromising their benefit coverage and eroding funds needed to pay for necessary medical treatment.  The U.S. Department of Labor’s Employee Benefits Security Administration is committed to ensuring the integrity of employee benefit programs and stopping fraud against employee sponsored health benefit programs;” said Employee Benefits Security Administration Regional Director L. Joe Rivers, of the Cincinnati Regional Office.

This case was prosecuted by Assistant United States Attorneys John Engstrom and Andrew Lievense.  The case was investigated by special agents of the Federal Bureau of Investigation and the U.S. Department of Labor Office of Inspector General.