September 9, 2016

DOJ Catch of The Week – US Healthcare Supply/Oxford Diabetic Supply

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “Catch of the Week” goes to medical equipment supply companies U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc.  On Wednesday, the two companies, along with their owners and presidents, agreed to pay more than $12.2 million to resolve allegations that they violated the False Claims Act by making unsolicited calls to Medicare beneficiaries to sell them durable medical equipment.  U.S. Healthcare Supply agreed to pay more than $5 million, and Jon P. Letko, its owner and president, agreed to pay more than $1 million.  His brother, Edward J. Letko, the owner and president of Oxford Diabetic Supply agreed to pay $6 million.  See DOJ Press Release.

According to the government, the two companies created a fictitious company called Diabetic Experts Inc., which they used to make the unsolicited calls.  The companies then submitted claims to Medicare for the equipment they sold based on these unsolicited calls.  The government claimed this conduct violated the Medicare Anti-Solicitation Statute.

In announcing the settlement, New Jersey U.S. Attorney Paul J. Fishman made it clear that this kind of cold-calling is improper and illegal. “Cold-calling people to sell them expensive medical equipment is prohibited for a reason: unsuspecting patients shouldn’t be coerced into making medical decisions about devices and equipment – which they may not even need – on the basis of a sales pitch.”  DOJ Civil Chief Benjamin Mizer stressed that the government “will continue to hold health care providers accountable for attempting to circumvent Medicare statutes and regulations that help prevent the submission of claims for medically unnecessary services and supplies.”

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