Home health-related fraud and dentists behaving badly (see this week’s earlier posts) have both been notable recent trends, but the U.S. Department of Justice (DOJ) has been even busier lately cracking down on fraud involving durable medical equipment. Most recently, on October 25, DOJ announced that Daniel Canchola of Flower Mound, Texas pleaded guilty to defrauding Medicare by prescribing DME and cancer genetic testing without ever seeing or speaking to the patients. Canchola received more than $466,000 in kickbacks for writing more than 15,000 fake orders in a single calendar year for Medicare beneficiaries who were targeted by telemarketing campaigns and at health fairs.
In a similar scheme, a Missouri U.S. Attorney’s Office announced on October 6 that Jamie McCoy, who owned or operated companies that supplied orthotic braces and other DME, was sentenced to 30 months in prison and ordered to repay $7.5 million in restitution. McCoy contracted with marketing firms who placed TV and online ads offering orthotic braces at no cost. Patient leads were passed on to a doctor who signed orders for DME, sometimes without ever evaluating or even communicating with the patients. McCoy then turned over 70-80% of his profits as kickbacks.
For those who may think a large company should know better, DME manufacturer Philips RS North America LLC, formerly known as Respironics, Inc., recently reached two settlements with DOJ. DOJ announced on September 22 that Philips agreed to pay almost $1.3 million to settle alleged violations of the federal Anti-Kickback Statute (AKS). Respironics facilitated an interest-free loan to a DME supplier and guaranteed it, so that the supplier would never have to repay the loan. And in the prior settlement, announced by DOJ on September 1, Respironics agreed to pay $24.75 million for more alleged AKS violations. Respironics gave DME suppliers free physician prescribing data to assist their marketing efforts, and the Respironics employee who blew the whistle will receive about $4.3 million of the federal settlement.
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