Chiropractic Associates: Paying Physicians for DME Referrals

In the Chiropractic Associates settlement, the clinic and its owner paid $365,000 to resolve allegations that they paid physicians for Medicare durable medical equipment referrals, generating false claims. The alleged exchange put the clinic on the paying side: money went to the physicians who could send equipment orders its way.

The Justice Department’s April 2, 2024 announcement put the combined settlements at $465,000. Two referring physicians each paid $50,000 under separate agreements.

What the Clinic Paid Physicians to Do

The government alleged that Chiropractic Associates and its owner paid referring providers to induce Medicare durable medical equipment orders from October 2017 through July 2021.

Croas 1 LLC, doing business as Chiropractic Associates, provided chiropractic, medical and durable medical equipment services in Ponca City, Oklahoma. Its sole member was an Oklahoma-licensed chiropractic physician. The separately settling referring doctors were osteopathic physicians licensed in the same state.

That direction matters. A manufacturer can pay a clinic to choose its product. Here, the government alleged that the clinic paid the referring side to send it Medicare durable medical equipment business. The financial incentive sat at the point where the patient was directed toward a supplier.

The government’s complaint against Vision Quest Industries alleged that the brace manufacturer supplied free braces when a chiropractor ordered from it, making the arrangement more attractive than a competitor’s price.

Can a Doctor’s Office Get a Kickback for Referrals?

Paying doctors to steer Medicare equipment orders is the kickback allegation at the center of this case. The government alleged that physicians received payments intended to induce referrals, and both the clinic paying and the doctors receiving settled those allegations.

The announcement explained that the Anti-Kickback Statute prohibits both paying for Medicare referrals and taking those payments. It also named the Physician Self-Referral Law, commonly called the Stark Law, which bars certain Medicare bills when the supplier has an improper financial arrangement with the referring physician.

The release gave compensation above the fair market value of services actually provided as an example of such a relationship. That makes the work behind a payment important: what the physician did, what the clinic paid for it, and how the arrangement connected to equipment referrals. The government linked the alleged referral payments to false Medicare claims under the False Claims Act.

The Agreement Behind the Referral

For an insider, the useful connection is between the benefit a referring physician receives, the work described in the arrangement and the equipment business that follows.

In a separate case, a whistleblower’s complaint alleged that Oxygen Plus paid Best Practice Family Health PLLC, a referring physician’s practice, to rent ventilators that Oxygen Plus supplied to Medicare patients for monthly reimbursements.

A person handling payments may know what the physician’s business received. Someone handling orders may see which patients and equipment came from that physician. The billing staff may see the Medicare claims. Our work is to connect those views to the decisions behind the arrangement, rather than leave each piece in a different department’s records. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Referral Was Worth

If you know how a clinic paid the physicians sending it equipment orders, speak to one of our Whistleblower Experts about what those physicians were paid. We work with you to build your strongest durable medical equipment whistleblower case from the referral and payment evidence. We bring in durable medical equipment fraud whistleblower lawyers who understand physician financial arrangements and stay beside you throughout the case.