Bay Sleep Clinic and Qualium: Unapproved Sites, Approved-Site Paperwork

In the Bay Sleep Clinic Qualium settlement, the clinic businesses and their owners agreed to pay $2.6 million over allegations of Medicare sleep-test and medical-device fraud. The government said tests happened at unapproved facilities while the paperwork placed them at approved ones. For someone who knew the testing rooms, the technicians or the billing operation, the difference was something they could recognize from an ordinary working day.

The Justice Department announced the settlement on December 28, 2016. It covered Bay Sleep Clinic, Qualium Corporation, Amerimed Corporation and their owners and operators.

Sleep Tests at Unapproved Locations

The government alleged that the defendants billed for tests at unenrolled, unapproved locations and regularly falsified documents to make those tests appear to have happened at approved sites. Qualium operated twenty sleep clinics under the Bay Sleep Clinic name. The alleged paperwork substitution pointed to one of the defendants’ two Medicare-approved locations.

The alleged solution to an unapproved testing site was to change the paperwork. An employee who knew where patients were scheduled or where technicians worked could see a different operation from the one the documents described.

Unlicensed Staff Behind the Sleep Tests

The government also alleged that the defendants billed Medicare for tests performed by technicians who lacked the licenses or certifications required for payment. It traced that alleged billing back as early as April 2002.

If you worked those shifts, you may know who performed the tests even when the billing documents tell a different story. Our work starts with that difference between the service and the claim.

In a separate case, the whistleblower’s complaint against Regional Home Care, doing business as North Atlantic Medical Services, alleged that unlicensed liaisons left patient-visit paperwork unsigned for a licensed supervisor to sign.

Why the Durable Medical Equipment Business Followed the Sleep Test

The Bay Sleep settlement also covered allegations that the defendants billed Medicare for medical devices in violation of rules separating sleep testing from equipment supply. The government described prohibited device supply by diagnostic sleep-test providers and prohibited sharing of a sleep-laboratory location with a durable medical equipment supplier.

A sleep test can sit at the beginning of a relationship that produces equipment payments and later replacement-supply claims. The business has an interest in the diagnosis as well as the device.

The CPAP payment structure makes that interest easier to see. Under the Medicare PAP coverage policy effective in January 2024, continued coverage beyond the first three months requires documented use and a clinical re-evaluation showing that the patient benefits from therapy. The machine’s recorded use becomes part of the payment decision.

After thirteen paid rental months, the CPAP becomes the patient’s property. Replacement masks, headgear, tubing and filters can remain an ongoing business after the base device leaves the rental stream.

In a separate case, Pacific Pulmonary Services settled allegations that some patient care coordinators sent patients to sleep-testing clinics in exchange for referrals back to Pacific Pulmonary for sleep-therapy equipment.

Qualium, Amerimed and the Names on the Claim

Qualium Corporation operated the Bay Sleep clinics. Amerimed Corporation did business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialists, according to the government. The court docket’s party list also included CPAP Specialist.

The sign on the building may not match the name on the claim. The government described a connected testing and equipment operation under common owners.

The Department of Health and Human Services’ Office of Inspector General’s Medicaid Fraud Control Units Fiscal Year 2014 Annual Report, published in 2015, described a separate equipment settlement involving allegations that a company billed Medicare and Medicaid for back braces supplied by an excluded company, then used false invoices to support the arrangement.

From the Whistleblower Case to the Settlement

A whistleblower brought the Bay Sleep qui tam case under the False Claims Act in the Northern District of California. The government joined the case.

The agreement also changed the defendants’ participation in Medicare. They voluntarily terminated their two existing enrollments and agreed not to re-enroll as Medicare providers or suppliers for three years.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Bay Sleep announcement also stated that the whistleblower would receive a share of the recovery.

What a Sleep-Clinic Insider Can Explain

A sleep-clinic insider may know the service in a way the bill never shows: the room where the test happened, the person who performed it and the company that supplied the equipment. Bay Sleep’s alleged false-location documents make the value of that knowledge plain. The approved address on a form could be contradicted by the people who worked at the actual testing site.

The useful account connects those working facts to the company’s billing decisions. A technician may know the staffing. Someone in scheduling may know the facility. Someone handling equipment orders may know which company supplied the device.

You Know Where the Test Happened

If you know why a sleep-test claim names a different location or hides who did the work, speak to one of our Whistleblower Experts about where the tests really happened. We build your strongest healthcare fraud case with you, bring in whistleblower lawyers who understand Medicare sleep-testing and equipment claims, and stay beside you throughout the case.