Archive

July 1, 2022

Reliance Medical Systems LLC and its owners Bret Berry and Adam Pike will pay $1 million to resolve allegations of False Claims Act violations by paying doctors to use their medical devices in spinal surgeries. Through its physician-owned distributorships (PODs), Reliance paid physicians for referrals, made false statements, and terminated physicians who didn’t refer enough patients, in one instance offering a surgeon a share of profits after he proved his “loyalty” to the POD. DOJ

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Medical Devices and DME,

May 18, 2022

Pat Truglia will spend 120 months in prison, forfeit over $9.4 million, and will pay restitution of $33.7 million for conspiring to defraud Medicare, TRICARE, and CHAMPVA, among others, of approximately $50 million through their fraudulent billing scheme. The scheme involved offering, paying, soliciting, and receiving kickback for durable medical equipment—in this case, braces. Truglia and his conspirators obtained DME orders for Medicare and other federal healthcare program beneficiaries by running multiple call centers, which paid kickbacks and bribes to telemedicine companies, who then paid doctors to write medically unnecessary orders. The orders were filled by Truglia’s companies, who then fraudulently billed the healthcare programs. USAO NJ

Tagged in: Anti-Kickback and Stark, Criminal Proceedings, Healthcare Fraud, Lack of Medical Necessity, Medical Devices and DME, Medicare, Other Government Health Programs, Provider Fraud,

April 29, 2022

Eargo Inc., which sells direct-to-consumer hearing aid devices to customers nationwide, has agreed to pay $34.37 million to resolve allegations of defrauding the Federal Employees Health Benefits Program (FEHBP) over a four-year period. Eargo allegedly submitted or caused to be submitted claims that contained unsupported diagnosis codes, even though an internal review of its billing and coding practices should have detected the error. DOJ

Tagged in: FCA Federal, Healthcare Fraud, Medical Billing Fraud, Medical Devices and DME, Other Government Health Programs,

April 21, 2022

Susan H. Poon, 57, will spend 70 months in federal prison, and will pay nearly $1.4 million in restitution for a scheme spanning over 3 years, and which resulted in approximately $2.2 million in fraudulent billings. Poon submitted prescriptions both with PII obtained at health fairs held by Costco and UPS, and by soliciting information from actual patients about their dependents—dependents whom Poon never saw or treated. Poon used the stolen PII to submit fraudulent durable medical equipment prescriptions to a DME manufacturer, who then unknowingly submitted false claims for reimbursement to a health insurer. In addition to the prison sentence and the owed restitution, Poon’s chiropractic license was revoked in 2019. USAO CDCA

Tagged in: Healthcare Fraud, Medicaid, Medical Billing Fraud, Medical Devices and DME, Medicare, Pharma Fraud,

March 24, 2022

A New York woman who defrauded the state out of millions of dollars has been sentenced to 3 to 9 years in prison and ordered to pay more than $4 million in restitution. According to the Attorney General’s Office, Leslie Montgomery lured low-income New Yorkers to Health Living Community Center under the guise of helping them find housing, then used their information to submit false claims to a Medicaid-funded managed care organization. The claims for custom-molded back braces were medically unnecessary and not requested by or provided to the intended recipients. Montgomery then hid the illegal proceeds through multiple shell companies, including LCM Livery P/U, Inc. NY AG

Tagged in: Healthcare Fraud, Lack of Medical Necessity, Medicaid, Medical Devices and DME, Money Laundering,

January 12, 2022

A diabetic shoe company, Foot Care Store, Inc., d/b/a Dia-Foot, and its President and CEO, Robert Gaynor, have agreed to pay $5.5 million to resolve allegations of billing Medicare and Medicaid for custom diabetic shoe inserts when in fact, their inserts were made using generic foot models. The alleged misconduct occurred between 2013 and 2018 and was revealed in a whistleblower’s 2018 qui tam suit. In addition to the monetary penalty, Dia-Foot has entered into a three-year Integrity Agreement that requires the company to implement updated policies and procedures and submit to quarterly independent review of its claims to Medicare and Medicaid. USAO SDFL

Tagged in: FCA Federal, Healthcare Fraud, Medical Devices and DME, Medicare, Whistleblower Case,

January 5, 2022

Two Florida men, Reinier Gonzalez Caballero and Alexeis Napoles Manresa, have each been sentenced to a little over four years in prison for laundering the ill-gotten proceeds of a $3 million healthcare fraud scheme against Medicare. Over a couple months in 2019, durable medical equipment company Universal Ortho Supplies, Inc. billed Medicare for orthosis and prosthetics that were never prescribed by physicians, nor provided to patients. The reimbursements were then turned over to the defendants, who attempted to disguise the source of the funds by setting up shell corporations and opening up fake bank accounts. Two co-conspirators have already been convicted and sentenced; another two have pleaded guilty and await sentencing. USAO SDFL

Tagged in: Criminal Proceedings, Healthcare Fraud, Medical Devices and DME, Medicare, Money Laundering,

December 8, 2021

The owner and medical director of Georgia’s Milton Hall Surgical Associates, Jeffrey M. Gallups, will pay $3 million, and medical device manufacturer Entellus Medical will pay $1.2 million, to resolve claims that they entered into an unlawful kickback arrangement. The government alleged that Gallups received cash payments and all-expense paid trips from Entellus in return for directing MHSA physicians to utilize sinuplasty related medical devices exclusively from Entellus and increase the number of sinuplasty procedures performed. In addition, Gallups was alleged to have received “commissions” from medical testing laboratory NextHealth, in exchange for directing MHSA doctors to order medically unnecessary toxicology and genetic tests from NextHealth. The settlement resolves a qui tam action initiated by former MHSA physician Myron Jones, M.D., who will receive approximately $614,000 from the settlement. USAO ND GA

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Medical Devices and DME, Provider Fraud, Whistleblower Case, Whistleblower Rewards,

November 8, 2021

Florida-based medical device company Arthrex Inc. has agreed to pay $16 million and enter into a five-year corporate integrity agreement to resolve allegations of paying kickbacks to a Colorado-based orthopedic surgeon in exchange for the surgeon’s use and recommendation of its products. According to a qui tam suit by whistleblower Joseph Shea, the kickbacks were disguised as royalty payments for the surgeon’s contributions to Arthrex’s SutureBridge and SpeedBridge products. For his role in the case, Shea will receive a relator’s share of $2.5 million. USAO MA

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Medical Devices and DME, Whistleblower Case, Whistleblower Rewards,

November 5, 2021

Two men who pleaded guilty to causing $134 million in false claims to be submitted to Medicare and CHAMPVA have been sentenced to federal prison and ordered to pay restitution of over $29 million. Michael Nolan of Florida was sentenced to 6.5 years, while Richard Epstein of Colorado was sentenced to about 5 years. Using a telemarketing company called REMN Management LLC, as well as a telemedicine company called Comprehensive Telcare LLC, Nolan and Epstein had bribed physicians to sign medically unnecessary orders for durable medical equipment, which they then sold to co-conspirators as support for the false claims. USAO MDFL

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Medical Devices and DME, Medicare, Other Government Health Programs,

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