DME Supplier Enrollment Fraud: Buying Billing Privileges and Concealing the Real Operator

DME supplier enrollment fraud uses false ownership or operating information to obtain or keep Medicare billing privileges. The person named as owner can be a stand-in while someone else directs the claims and controls the money. If you handle enrollment, billing or payments, you may see the person running the business every day and know that Medicare has been told a different story.

What a Medicare Supplier Enrollment Buys

Enrollment gives a durable medical equipment supplier access to Medicare payment. The Centers for Medicare & Medicaid Services describes the supplier’s job as both supplying the item and submitting the claim. In the commercial chain, a marketer may generate the lead, a telemedicine company may arrange the clinical encounter, and a practitioner may produce the order. The enrolled supplier turns that order into a claim.

The application is CMS-855S, filed for each location. It brings together ownership information and the qualifications for billing, including accreditation or exemption, licensing and physical premises. New suppliers face site visits and fingerprint screening. The Medicare supplier number belongs to the enrolled location.

Accreditation and enrollment do different work. The survey concerns the supplier’s compliance with quality standards. Enrollment identifies the business Medicare will authorize to bill. Buying a company with that access already in place gives the buyer something a newly formed business still has to obtain.

The payer matters, too. The Inspector General identifies screening gaps in Medicare Advantage. Suppliers serving those plans can operate outside traditional Medicare’s enrollment and accreditation requirements. In a request for information, the Centers for Medicare & Medicaid Services asked whether those requirements should be comparable. An insider following claims needs to know which Medicare program paid them.

Regency and the Business of Creating Front Companies

In its announcement of the Regency owner’s guilty plea, the Justice Department described the criminal case’s court documents: the owner and her conspirators used Regency to establish dozens of durable medical equipment fronts in straw owners’ names. The department said the concealed operators gained control of multiple suppliers and explained the high claims volume as telemedicine while bribing doctors to approve orders, almost always without a telehealth interaction with the beneficiaries.

The separate civil settlement announced in February 2021 required Regency and its owner to pay up to $20,332,516. It resolved allegations that included falsifying documents to establish durable medical equipment companies that billed for medically unnecessary equipment. A former Regency employee brought the qui tam case.

The paperwork created the appearance of separate suppliers. The people behind them controlled the claims. That is why the employee who understands how the companies were formed can know something the person reviewing an individual equipment order cannot see.

Gold Rush and the Purchase of Existing Suppliers

The criminal indictment described in the Justice Department’s Gold Rush announcement alleged a different route to the same access. The organization bought dozens of durable medical equipment companies that could already bill Medicare and supplemental insurers. It paid nominees to appear as owners and created fictitious corporate records saying those nominees controlled the businesses. The alleged control remained with the organization’s leadership overseas.

The indictment also alleged that the nominees used false ownership documents to open bank accounts. Medicare and supplemental-insurance payments arrived in the suppliers’ names, then money moved to shell companies and foreign banks. The organization allegedly acquired replacement suppliers as others were shut down and used stolen beneficiary identities to generate claims.

When a DME buyer uses a nominee to preserve Medicare enrollment, the person on the sale paperwork and the person giving the billing instructions can be different. Gold Rush’s alleged arrangement carried that concealment into the bank. The same nominees allegedly appeared in the corporate records and the bank documents. The alleged scheme took health care dollars from taxpayers using beneficiaries’ stolen identities.

What Is the DME 36-Month Rule?

The DME 36-month rule requires a buyer acquiring a majority interest soon after enrollment or a previous majority sale to enroll as a new supplier and obtain new accreditation. Under the Centers for Medicare & Medicaid Services’ ownership rule, Medicare billing privileges do not pass to the new owner when a non-exempt sale occurs within 36 months of initial enrollment or the most recent change in majority ownership.

The ownership threshold is more than 50% of the direct ownership interest. A string of smaller sales that adds up to a majority also counts.

The DME change in majority ownership rule has three exceptions to that 36-month restriction: an internal restructuring of the supplier’s parent company, a change in business structure with the same owners, and an individual owner’s death. Each exception concerns what actually happened to the ownership. A nominee’s name on a document leaves the practical question unanswered: who acquired control and who is exercising it?

The Durable Medical Equipment Enrollment Moratorium

The DME moratorium announced on February 27, 2026 imposed a six-month nationwide restriction on new enrollments and new practice locations for medical supply companies. The Centers for Medicare & Medicaid Services defined those companies by their principal business of furnishing equipment and supplies. The moratorium expired on August 27, 2026, when CMS announced that its enrollment contractors were again accepting initial applications from durable medical equipment suppliers.

The restriction reached acquisitions, too. A majority ownership change requiring new enrollment put the buyer inside the moratorium. The agency also said it would use site visits and online research to check businesses applying under another supplier type. Calling a medical supply company something else could conceal the very activity CMS was reviewing.

The agency’s explanation connected ownership changes to actual claims. It reported identifying a catheter-billing surge in early 2023 involving 15 recently acquired suppliers. Its investigation found that beneficiaries had not received the catheters, physicians had not ordered them and the supplies were unnecessary. CMS stopped payments and revoked the suppliers’ enrollments. The ownership transaction and the billing surge belonged in the same investigation.

The Records That Reveal the Real Operator

A purchased DME company with its real owner missing from CMS-855S presents a question that reaches beyond the application: who directs the work and receives the money? The comparison runs across records kept by different people inside the business.

In the Oxygen Plus complaint, two whistleblowers alleged that the owner falsely certified that neither she nor her relatives owned other medical entities. Her husband allegedly owned Best Practice Family Health, referred patients to Oxygen Plus and rented ventilators to it. The certification, referrals and rental payments described, according to the complaint, a business relationship the written answer concealed.

The Shreveport Prosthetics complaint alleged that, after enrollment lapsed, management moved patient paperwork to Texas Prosthetic Center so that the Texas business could submit the Louisiana operation’s claims. It also alleged that a Texas prosthetist would sign delivery records for patients she had never seen or evaluated. Before a Medicare inspection, the whistleblower alleged, a manager sent this instruction:

According to the complaint, the staff knew about the other operation. The alleged instruction was to keep the inspector from learning about it. That internal direction makes the difference between the business’s representations and its daily work visible.

A Transfer Can Leave the Same Operator in Place

Union Foot Solutions obtained Medicare enrollment after its founder transferred ownership, but the founder continued providing care. In the civil settlement’s admissions, he acknowledged that the original application falsely denied his license revocation and exclusion from federal healthcare programs. CMS rejected that application. A new owner then obtained enrollment while the founder continued working for the company.

The government alleged that Union Foot Solutions billed for his work under another pedorthist’s name to conceal his involvement. The ownership changed on paper. The person treating patients remained.

The Office of Inspector General’s Medicaid Fraud Control Units Fiscal Year 2014 Annual Report, published in 2015, describes another way an excluded operation allegedly reached Medicare and Medicaid through an enrolled equipment company. In a West Virginia civil matter, the equipment company allegedly billed for back braces supplied by the excluded company. The report follows the payment beyond the first recipient:

The bank deposit was only the beginning of the payment trail. The invoices and onward payments connected the enrolled company to the excluded business supplying the braces.

What an Enrollment Whistleblower May Know

The enrollment employee may know who supplied the ownership information. The billing employee may know who ordered the claims submitted. The person handling payments may know who controls the account behind the supplier’s name. We trace those decisions to what Medicare was told and what it paid.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The strongest starting point for our conversation is the difference you can explain between the business Medicare sees and the business you know.

You Know Who Runs the Business

If the owner named to Medicare answers to someone you know is running the operation, speak with our whistleblower experts about who really runs the supplier. We work beside you to build the case around the concealed control, the claims and the money, and bring in Medicare fraud whistleblower lawyers who understand supplier enrollment. Your knowledge of who gave the instructions belongs at the center of that work.