1st Class Sleep Businesses: Repeat Studies and Concealed Results

The 1st Class sleep study fraud case exposed unnecessary repeat tests and concealed results, according to the Justice Department’s account of the former owner’s criminal trial. Patients arrived with legitimate referrals, but the owner directed employees to solicit additional, medically unnecessary studies and keep their results from the referring doctors. The same doctors’ identities then appeared on insurance claims without their permission.

The businesses were 1st Class Sleep Diagnostic Center and 1st Class Medical in Northern Virginia. The Justice Department’s December 7, 2018 announcement described how the owner used those businesses to defraud Medicare, TRICARE and private insurers. For someone inside a sleep practice, the revealing detail is the split between what the doctor knew, what the patient heard and what the insurer paid for.

Repeat Sleep Studies With Results the Doctor Never Saw

This sleep-practice fraud began with a real referral and continued with tests the government said were medically unnecessary. The owner instructed employees to withhold those additional results from patients’ doctors. She also lied to patients by telling them they would not have to pay copays or coinsurance.

That combination served the business at both ends of the appointment. Patients heard that another study would cost them nothing, while their doctors were denied the results that could reveal what the business was doing. The clinical relationship supplied the patient and the physician’s identity, then the business kept the physician out of the extra testing’s paper trail.

We see the absurdity in that arrangement: the doctor was useful enough to name on the bill, but inconvenient enough to keep uninformed. For an insider, the instruction about where a report must not go can explain as much as the report itself.

The medical necessity of a repeat study connects the earlier findings to the reason for another test. We read those earlier findings against the repeat study and the instructions staff received.

Whose Identity Appeared on the Claim?

The owner used the original referring doctors’ names and identifying information on health insurance claims without their permission, according to the Justice Department’s account of the criminal trial. Those doctors were a source of identities for the claims and people from whom results were concealed.

The owner cross-billed to conceal repeated studies from insurers and to obtain out-of-network payments for in-network services. The billing entity helped change both what an insurer could see and how the service was paid.

For a billing employee, the important connection may be between a study conducted in the practice and the business named on its claim. For a referring clinician, it may be between the study actually ordered and later claims using that clinician’s identity. We examine those connections together, because the clinical record and the billing record can each show only part of the transaction.

Three Employees, at Least 27 Sleep Studies

The Justice Department reported that claims charged in the indictment concerned three employees who did not have sleep apnea but nevertheless received at least 27 sleep studies among them in less than three years. Employees received payments for undergoing studies that were billed to insurance.

The recruitment went further. In some instances, employees were organized into teams to compete over who could refer the most friends and family members for fraudulent studies. Paying employees to undergo tests and turning referrals into a contest made the pressure to produce studies visible inside the business.

A person who worked those appointments may know how the testing was arranged and what staff were told. That knowledge can connect repeated appointments to the payments and instructions that made them happen.

What Evidence Does a Whistleblower Need?

For this kind of sleep-study billing, the useful evidence connects the referral, study, result and claim with someone who knows how each was created. Medical records must support the work performed, its medical necessity, signatures and the coverage conditions for the service. In this case, withholding a result and borrowing a physician’s identity separated pieces of that account that an insider could reconnect.

The 2017 Journal of AHIMA article Busting Bad Medicine: a Call to Action Addressing Healthcare, Fraud, Waste, and Abuse describes comparing treatment dates, treatment details and nurse or physician signatures, then seeking witnesses who know what happened. Applied to repeat sleep testing, that means understanding both the written account of a study and the instructions behind it. A report can show a test result. A staff member can explain why that report never reached the referring doctor.

The 2020 Journal of Forensic and Investigative Accounting paper A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud explains why inside knowledge matters to a False Claims Act case. Its point fits the gap between a claim that looks complete and an employee who knows how it was produced:

Another Sleep-Practice Case Puts the Billing Identity in Focus

Innovative Sleep Centers paid $644,562 to resolve allegations that visits performed by other staff were billed under its medical director’s identity, including visits by unqualified office staff. The government also alleged that technologists without required credentials performed sleep studies. The payment resolved a False Claims Act whistleblower case over who did the work and whether they were qualified to do it.

The Justice Department’s announcement of that civil settlement describes a different use of physician identity from the criminal trial account involving the 1st Class businesses. Together, the cases show why we connect the person named on a claim to the actual work, the people performing it and the reason for the test. A physician’s name on the bill can hide the very decision an insider understands.

The Civil Whistleblower Case Behind Comparable Billing

For someone who recognizes comparable claims to Medicare or TRICARE, a civil whistleblower case focuses on the false claims for government money. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We work with the insider to connect the unnecessary test, the concealed result or the borrowed identity to the claims the government paid.

You Know Why Another Study Was Booked

If you saw repeat studies solicited, results held back or a doctor’s identity used without permission, tell our whistleblower experts what happened inside the practice. We build your strongest sleep-study whistleblower case from your knowledge of the appointments and billing, bringing in health care fraud whistleblower lawyers who understand sleep-testing claims. We stay beside you through the whole process, with your account of how the business worked at its center.