Eagle Calf Technical Corporation: Cheaper Supplies Billed as Closed Systems

In the criminal case, prosecutors told the court that Eagle Calf Technical Corporation’s vice president caused $1.4 million in government losses through catheter Medicaid fraud: billing for expensive closed-system catheters while supplying cheaper disposable kits. The Justice Department’s announcement about the criminal case against the vice president traced the evidence back to the wholesalers: what the company bought told a different story from what it billed.

The vice president was a respiratory therapist from Rexford, Montana. Eagle Calf supplied medical equipment and services on the Blackfeet Indian Reservation, serving generally low-income Medicaid-eligible patients in the Browning area. The government’s November 26, 2014 announcement described a scheme involving tracheal suction catheters supplied to one patient.

What Upcoding Meant at Eagle Calf

Upcoding meant charging Medicaid for a more expensive product than the one Eagle Calf furnished. According to the criminal-case announcement, the company provided Cath-n-Glove kits to the patient from 2003 through November 2011, while its vice president billed for closed-system catheters.

The criminal-case announcement says Medicaid received bills totaling more than $1.7 million for over 108,000 closed-system catheters, all supposedly for one patient. These were products meant to last several days, not supplies discarded after each use. It says reimbursement for the equipment actually supplied would have been approximately $300,000.

Here, the same company had a purchasing history for the cheaper product and a billing history for the more expensive one. An insider who recognizes both descriptions can connect records that otherwise tell only part of the story.

What Does “Closed System Catheter” Mean?

In this case, a closed-system catheter was a tracheal suction product that could be used for several days, typically up to a week. The Justice Department contrasted it with disposable Cath-n-Glove kits, designed for a single use, which a patient might need several times a day.

The announcement put the closed-system catheter’s cost at approximately $16 each and described the disposable kits as much less expensive.

The Purchases That Contradicted the Claims

Investigators found 59 wholesale invoices documenting purchases of 20,626 Cath-n-Glove kits from six suppliers during the years covered by the charges. The government’s criminal-case announcement then stated the fact that made those invoices especially telling:

Paired with the account of what the patient received, the invoices exposed a claim for a product absent from those purchases. The supplier’s own buying history became evidence against its billing description.

What an Insider Can See Across the Records

For a catheter upcoding case, we connect the product ordered and purchased, the product delivered, the claim submitted and the payment sought or received.

We compare product descriptions and quantities across those records, alongside the clinical account of the supplies used.

The employee’s knowledge gives those records meaning. If you worked in purchasing, you may know why the business repeatedly ordered the cheaper kit. If you handled claims, you may know how the more expensive description entered the billing system. If you provided respiratory care, you may recognize the product the patient used. Those are different views of the same transaction.

We also look at who made the billing decision and what they knew about the product being supplied. In the criminal-case announcement, prosecutors described a respiratory therapist who had worked in hospitals and owned a medical supply business before helping start Eagle Calf. By 2001, the vice president was the sole signatory on the company’s bank accounts.

That brings the health care and financial sides of the business together. According to the criminal-case announcement, the person who chose the false billing description knew respiratory supplies and controlled the company’s bank accounts. For an insider, that connection can matter as much as the product label: who understood what was being supplied, and who controlled the money coming back?

Product Knowledge Can Support a Civil Whistleblower Case

In its January 12, 2022 announcement, the Justice Department said Dia-Foot resolved allegations that it sold diabetic shoe inserts as custom products when they were not custom-fabricated according to Medicare standards. A former employee brought the whistleblower case.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Which Catheter Went Out

If you saw disposable kits supplied while closed-system catheters appeared on the claims, speak with our whistleblower experts about the catheters you saw billed. We build your strongest case with you, bring in healthcare fraud whistleblower lawyers who understand Medicaid equipment billing, and stay beside you through the pursuit of a recovery.