Rogers woman pleads guilty in $4 million kickback scheme

FAYETTEVILLE -- A former executive with a Rogers medical supply and billing company pleaded guilty Tuesday to federal fraud and kickback charges.

Amanda Dawn Rains, 39, waived indictment by a grand jury and pleaded guilty to a criminal information charging her with conspiracy to violate five federal statutes.

Rains, who was hired as the billing director of an unidentified Rogers corporation in 2013, joined in a fraud scheme that ran from 2011 until 2017 and defrauded federal and private workers' compensation insurers, according to court documents.

Rains pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees' compensation and paying kickbacks to defraud the government and private insurance companies by over-billing for unnecessary medications, according to a news release from the U.S. Department of Justice.

Rains promises in her plea agreement to pay restitution to the Department of Labor and other insurers victimized in amounts to be determined. Prosecutors said total losses include more than $3.9 million paid by the Department of Labor and amounts paid by private insurers are still to be calculated.

As a result of her guilty plea, Rains faces a maximum of five years in prison. The court will determine her sentence at a later date, after a sentence investigation report is prepared.

Physicians were recruited under the scheme to dispense pain creams and patches to their workers' compensation patients by offering the doctors a split of the profit collected from billing insurers, typically 50%.

One physician, Robert Dale Bernauer Sr., ran a clinic in Lake Charles, La. Bernauer pleaded guilty to his role in the conspiracy July 30. Payments related to medication dispensed by Bernauer alone totaled almost $2 million, prosecutors said. He has paid $1,025,273 restitution.

The Rogers company supplied the doctors with pain creams and patches and acted as the billing agent for the physicians, who had signed contracts, according to court documents.

The firm handled all of the paperwork and submitted fraudulent claims, according to court documents. The company billed insurers at markups 15 to 20 times what the medications cost and then paid the physicians kickbacks.

Rains managed the billing system for the corporation and electronically submitted fraudulent claims to the U.S. Department of Labor and private insurers; maintained a list of insurers refusing to pay the company's claims; advised doctors and clinics how to respond to insurance companies questioning the charges; shipped the company's medications; prepared presentations used by the company to recruit doctors that falsely claimed the business arrangement didn't violate anti-kickback laws; and continued to ship medication to Bernauer and bill insurers for his prescriptions despite knowing he didn't have a Louisiana license to dispense medications.