Fort Pierce DME Owner: Paid for Orders, Billed for Braces

A Fort Pierce durable medical equipment owner paid $850,000 in a civil settlement to resolve allegations that he paid kickbacks and caused false claims in a durable medical equipment fraud scheme. The criminal information alleged that his business bought patient information, paid for medical practitioners’ signatures and turned the resulting brace orders into government claims. For someone inside a supplier, call center or telemedicine company, the important part is what those payments bought. The invoice might say consulting. The criminal information said the product was a doctor’s order.

The Justice Department’s January 18, 2024 announcement describes a guilty plea to conspiracy to commit health care fraud and a separate civil settlement paid the previous year. Private whistleblowers brought the False Claims Act case that led to the civil payment. The criminal case explains how the orders and money moved through the business.

How Does DME Fraud Work?

The criminal information, the document charging the conspiracy, alleged that the operation bought beneficiary information and paid a telemedicine company to obtain signatures on brace orders regardless of medical necessity. It described a scheme beginning around May 2019 involving eight durable medical equipment companies in Fort Pierce, Florida.

The information identified Remote Solutions LLC as the owner’s call-center business in Greenville, South Carolina. It alleged that the operation purchased Medicare beneficiaries’ identifying information and purported health information from third-party call centers to generate doctors’ orders. The Justice Department’s announcement says the signed orders were used to submit false claims to Medicare and cause false claims to reach CHAMPVA, the Department of Veterans Affairs healthcare program.

The information also alleged that the call-center operation contacted Medicare beneficiaries and induced them to provide personal and health information and agree to accept braces.

Here, the criminal information alleged the same owner on both the call-center and supplier sides, with paid signatures connecting the patient information to the claims.

On the information’s account, the customer acquisition process was producing the medical paperwork. Someone working in that process could see what the government’s claim form would leave out: where the patient information came from and what had to be paid before an order arrived.

The Claim Needed More Than a Signature

The criminal information states that Medicare would not reimburse claims obtained through kickbacks and bribes.

The government also described how the claims reached another payer. Under the processing arrangement set out in the information, Medicare handled a claim first and electronically forwarded it to CHAMPVA. CHAMPVA then processed the remaining portion.

What the Criminal Case Shows About the Business

The criminal information alleged concealment at both ends of the business: who controlled the suppliers and what their payments purchased.

Other Names on the Ownership Forms

Prosecutors alleged that the owner paid other people to appear as owners on Medicare enrollment forms while he controlled the suppliers. At Serenity DME, LLC, another person allegedly appeared on the paperwork as the owner. At BracePros, LLC, the information alleged that his 80% ownership interest went undisclosed to Medicare.

The alleged false disclosures on Form CMS-855S hid the connection among the companies submitting claims.

For someone who worked with these businesses, the person named on an enrollment form and the person running the operation were different questions. The government’s allegations joined them: concealed control of the suppliers, purchased orders and claims generated through those suppliers. An ownership record becomes much more useful when it can be connected to the decisions behind the billing.

Consulting Invoices for Purchased Orders

The information alleged that false invoices described payments as marketing and consulting hours when the owner was actually purchasing doctors’ orders. An accounting description made a payment for a prescription look like a payment for services.

That is the detail a billing employee or accounts-payable worker might recognize. The invoice describes time. The transaction delivers an order. We examine that difference with the insider who knows what work was actually performed and what the business received in return.

For the period from around May 2019 through December 2020, the criminal information alleged approximately $29.6 million in false Medicare claims and approximately $15.2 million paid on them. The allegation connected those claims to kickbacks, medically unnecessary braces and equipment ineligible for reimbursement.

The filing also alleged that money received from Medicare and CHAMPVA moved from the suppliers to the owner through bank accounts in Remote Solutions’ name and another entity he controlled. The call-center company appeared on the money side as well as the patient-information side.

What the Civil Settlement Shows

The civil settlement resolved allegations that the owner provided kickbacks and caused false claims in violation of the False Claims Act. The Justice Department identifies a qui tam case brought by private whistleblowers as the origin and says the whistleblowers received a share of the settlement.

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

For an insider in a similar operation, the useful starting point is the connection they can explain: patient information becoming an order, a payment obtaining a signature, or supplier accounts receiving money from the resulting claims. Our whistleblower experts assess those connections with you.

What Evidence Is Needed to Report Medicare Fraud?

For a brace-order scheme like this one, we work with you to connect the patient information, signed order, payment and claim. Enrollment and ownership records can also show whether apparently separate suppliers answered to the same person.

The accounting label deserves particular attention because it was part of the alleged concealment. We examine those invoices with you alongside the orders the business received and the claims it generated. A supplier employee may know what arrived for billing. Someone at the call center may know how the beneficiary information was obtained. Someone handling payments may know what the invoice was meant to cover.

The Same Order Buying in Other Cases

The same order-as-product pattern appears in a separate government complaint against AZ Diabetic Supply. The government alleged that a middleman used leads to obtain prescriptions and then sold the completed paperwork to durable medical equipment suppliers:

In that complaint, the government alleged that the supplier was buying a prescription with beneficiary data attached. Calling the purchase a lead or a consulting service would hide the very thing that made it useful for billing.

The Department of Health and Human Services’ inspector general describes the same structural problem in its July 2022 telemedicine fraud alert: a telemedicine company can sell the order or prescription generated by a practitioner. The alert identifies arrangements where practitioners lack enough patient contact or information to assess medical necessity and receive compensation tied to the volume of items ordered.

You Know What the Invoice Bought

If you know how a consulting payment became a signed brace order, talk to our whistleblower experts about the operation you saw. We build the case with you, bring in durable medical equipment fraud whistleblower lawyers who can pursue the order purchases and resulting claims, and stay beside you throughout the case.