Excluded DME Operators: The Owner Changed, the Operator Stayed

An excluded DME supplier cannot receive Medicare payment, and billing under another name can hide who actually furnished the care. If the paperwork says the business changed hands but the excluded person still fits patients or orders their equipment, the ownership file tells only part of the story. Someone inside the business knows whose work is reaching Medicare under somebody else’s name.

Excluded DME Supplier Medicare Billing Through Another Owner

Putting another owner on the enrollment application does not make an excluded person’s services payable. Union Foot Solutions, doing business as Union Orthotics and Pedorthics in Schenectady, New York, shows how the company on the paperwork can obscure the person treating patients.

In its March 2023 settlement announcement, the Justice Department said a former surgeon agreed to pay $42,000 to resolve allegations that he caused Union Foot Solutions to submit false Medicare claims.

His admissions in that settlement explain how the business obtained access to Medicare. He had been excluded from federal healthcare programs in 2000 after the state revoked his medical license. He later opened the supply company and applied for Medicare enrollment. The application falsely denied both the license action and his exclusion. The Centers for Medicare & Medicaid Services rejected it because he was excluded and the company could not receive Medicare payment.

He then transferred his ownership interest to a third party. The new owner reapplied and obtained Medicare authorization. The former owner kept working at the company, providing orthotic and prosthetic care. The application had a different owner. The patients still had the excluded practitioner.

The Justice Department separately alleged that, from December 2016 through February 2018, he caused the company to bill Medicare for services he furnished and items he ordered. To conceal his involvement, the company allegedly billed in another pedorthist’s name. The company allegedly charged taxpayers for the work of the very practitioner Medicare had excluded.

Exclusion Reaches the Work Behind the Claim

Exclusion bars federal health care program payment for items or services furnished by an excluded person, including care provided at that person’s medical direction or on that person’s prescription. Equipment coverage concerns what Medicare can pay for. Exclusion reaches who furnished or ordered it.

The supplier relationship matters too. Under Medicare’s supplier standards, a durable medical equipment business may fill orders from its own inventory or through contracts with other companies. It may not contract with an entity excluded from Medicare or a state health care program. A supplier’s own enrollment therefore leaves another question to answer: who is actually supplying the item?

The HHS Office of Inspector General’s Medicaid Fraud Control Units Fiscal Year 2014 Annual Report, published in April 2015, describes a West Virginia civil settlement involving that arrangement. A durable medical equipment company allegedly billed Medicare and Medicaid for back braces provided by an excluded company. The report describes where the money went:

The alleged arrangement gave the excluded company access to public payments through a supplier that billed in its place. The invoices and payments between the businesses are where that alleged relationship becomes visible.

What Is the DME 36-Month Rule?

The durable medical equipment ownership rule generally requires a supplier sold through a change in majority ownership within 36 months of its initial Medicare enrollment, or its most recent such change, to enroll anew. The Centers for Medicare & Medicaid Services explains in its February 2026 enrollment notice that the existing enrollment ends and the supplier must undergo a survey and obtain new accreditation.

Medicare’s supplier standards also prohibit transferring a supplier number to someone else. Buying the business and obtaining permission to bill Medicare are separate matters.

The same notice described a fraud scheme involving 15 durable medical equipment companies that had recently changed ownership. Its investigation found that beneficiaries had not received the catheters, physicians had not ordered them and the supplies were not needed. The agency said it stopped payments and revoked the companies’ Medicare enrollments.

The change of ownership connected an enrolled supplier to claims for equipment patients never received.

DME Supplier Exclusions in General and Specialty Categories

The HHS Office of Inspector General’s List of Excluded Individuals/Entities may list a durable medical equipment supplier under a general category or a specialty category, so a check for equipment suppliers needs to cover both fields. The practitioner behind the supplier may appear under their own profession.

The excluded operator behind Union Foot Solutions appeared under physician and surgery classifications. A search limited to durable medical equipment suppliers would miss the practitioner whose work the supplier allegedly billed. The employee who knows who treated the patient supplies something a category filter cannot: the connection between the supplier and the individual behind its claims.

Exclusion Records Can Split the Same Company Across Names

Shreveport Prosthetics appeared in the exclusion records under both “SHREVEPORT PROSTHETICS, INC” and “SHREVEPORT PROTHETICS, INC.” The entries recorded different grounds: breach of a settlement agreement in March 2021 and breach of a corporate integrity agreement in September 2021.

The exclusion list carries parties whose exclusions remain in force and removes reinstated parties. For historical billing, what matters is the exclusion in force when the work occurred. We connect the company names, people, locations and dates to the claims, including records separated by a spelling error.

What the Billing File Can Show

The billing file can connect the enrolled supplier to the person who ordered, fitted or delivered the equipment. The enrollment application and ownership documents identify the business Medicare approved. Orders, patient records and delivery tickets show whose work reached the patient. Claims and payments show which supplier billed and where the money went.

A whistleblower’s complaint concerning Shreveport Prosthetics, filed before the company’s exclusions, alleged that staff were told to hide other offices from Medicare inspectors. The complaint quotes a company representative:

The same complaint alleged that patient paperwork and claims would move to a Texas affiliate while the Louisiana company sought reenrollment. These allegations concern what staff were told to do with the supplier identity and the patients’ files. They show why the directions inside the business matter alongside the name displayed on a claim.

We connect those instructions with the ownership history, enrollment, the supplier’s National Provider Identifier, orders and delivery records. In an excluded-operator case, that comparison can show whose services the company billed and what management knew about the exclusion. The care, the claim and the instructions to use another name can make the conduct visible together.

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

You Know Who Still Does the Work

If you know an excluded operator still treats patients or supplies equipment behind a different billing name, speak with our whistleblower experts about the people and claims you recognize. We build the case with you around the ownership records, the work performed and the decisions that kept the claims moving. We bring in Medicare fraud whistleblower lawyers who understand supplier enrollment and durable medical equipment billing, and stay beside you throughout the case.