SNAP Diagnostics Sleep Testing Settlement: Extra Test Nights and Referral Benefits

SNAP Diagnostics and two executives agreed to pay $3,925,000 in a sleep testing settlement resolving allegations of unnecessary extra home-test nights and kickbacks for referrals. The alleged extra testing increased both federal payments and patients’ copays. If you handled orders, interpretation reports or sales commissions, the case connects those parts of the business to the claims sent for payment.

SNAP Diagnostics supplied home sleep tests as an independent diagnostic testing facility. The Justice Department announced the settlement on June 6, 2022, after two whistleblowers brought qui tam cases under the False Claims Act. The agreement covered both the testing allegations and the benefits allegedly offered to the people directing business to SNAP.

How Extra Home-Test Nights Became Extra Claims

The United States alleged that SNAP routinely billed federal health care programs for additional home sleep tests that lacked medical necessity and physician orders. The settlement agreement’s account of the conduct covered March 3, 2009 through July 26, 2021 and identified billing codes G0399, G0400, 95800 and 95806.

The United States alleged that SNAP and the two executives knew that its recorders needed only a few hours in a single night to diagnose obstructive sleep apnea, the devices’ sole approved purpose. It alleged that they nevertheless sought payment for extra tests, misled referring providers about how much testing was necessary and multiplied beneficiaries’ copays. The United States also contrasted the extra federal claims with one-night testing for privately insured patients.

We see a recorder that could finish its job while the billing kept going, in the United States’ account. If you worked with the orders or recordings, you may know where the extra nights entered billing. The claims had outgrown the doctor’s order.

Home testing leaves a sequence of records behind it. Device assignment and instruction precede the patient’s recording, which then goes through return or upload, quality review, scoring and interpretation. The claim adds the service code, component, date and units. An insider who knows how those records fit together can explain where an additional night entered the payment story.

When Can Another Night of Home Testing Support Another Claim?

Another night of home testing can support another claim when the treating order, medical need and payer’s requirements support the additional service. If a provider billed for three home-test nights with one order, we look at the order’s scope, the reason for the additional testing and the claims that followed. That is the connection at the center of SNAP’s extra-test allegations.

For example, Noridian’s billing article revised September 11, 2025 requires persuasive medical evidence for additional home-testing sessions for suspected obstructive sleep apnea. It also requires the physician’s order in the medical record.

The clinical reason matters as much as the count. Noridian’s sleep-testing coverage policy identifies equipment failure, insufficient sleep and inconclusive results as possible reasons to repeat polysomnography. In SNAP’s case, the United States alleged that the additional home-test claims lacked both medical necessity and the physician orders for those tests.

Referral Benefits Beyond the Test

The United States alleged that SNAP used referral benefits to feed the extra-testing business. Its agreement described unsigned interpretations for privately insured patients, commissions to independent marketers and free or discounted tests for referral sources. Each arrangement offered value to someone who could bring SNAP more testing business.

Private Interpretations Left Unsigned

SNAP allegedly performed the interpretation of home sleep tests for privately insured patients, then sent referring physicians its unsigned interpretation reports so those physicians could retain the professional-component billing. The alleged benefit was the opportunity to bill for that professional work. The private patient’s report was part of the referral arrangement described in the federal case.

The distinction between technical and professional work matters here. A global diagnostic service includes both components, while separate component billing identifies the technical service or the professional interpretation. To understand the alleged benefit, we connect the interpretation SNAP supplied, the report the referring practice received and the professional service the practice billed.

The Pinnacle Health Care and Yakima Sleep Center resolution shows another way that split can matter. The Justice Department alleged that clinics billed both components of sleep studies when they performed only the technical work and outside physicians separately interpreted and billed for some studies. For an insider, report authorship and the payment for interpretation belong in the same account of the service.

Commissions and Free Tests

The United States alleged in the settlement agreement that SNAP used independent contractors to market its services directly to referring physicians and paid commissions per test sold, claimed and paid, including tests for federal program beneficiaries. It attributed direction of that arrangement to the founder and assistance to the marketing executive. A commission schedule tied to the test’s progress through billing connects the sales operation to the public claim.

The United States also alleged that SNAP offered referring providers, their families and their staff free, discounted or no-copay home tests to induce them to send all their home sleep-testing business to SNAP. The benefit could therefore sit in a provider’s own test account while the referrals appeared elsewhere in the business. We look at the offer, the recipient and the resulting claims together.

These allegations reach employees who may never have scored a recording. Someone administering commissions or handling a referring practice’s account may know how the benefit was offered and tied to business sent to SNAP. That knowledge can connect the sales promise with the order and payment records.

The Company, the Payers and the Whistleblower Cases

The agreement identifies SNAP Laboratories International, LLC as the predecessor to SNAP Diagnostics, LLC. It identifies the two executives by their business roles: SNAP’s founder, president and chief executive, and its vice president of marketing and business development. Those distinctions matter when tracing who directed the arrangements and which entity submitted the claims.

The covered programs included Medicare, TRICARE, federal employee health coverage, Veterans Affairs health care and Railroad Retirement Medicare. The extra-testing allegation also expressly named CHAMPVA. The agreement treated the payers’ suspended funds separately.

Two whistleblowers brought the cases, and the United States joined them against SNAP and the two executives in 2017. The Justice Department credited the FBI, the Defense Criminal Investigative Service and the federal programs’ inspectors general for their work on the case.

How Suspended Payments Funded the Settlement

The agreement assigned SNAP a $3.5 million obligation, payable through permanent retention of that amount from Medicare payments already held in suspension. The founder separately agreed to pay $300,000, and the marketing executive agreed to pay $125,000. The company agreed to give up money the government already held.

The Defense Health Agency and the Railroad Retirement Board also held suspended payments, which received separate treatment under the settlement. An employee familiar with payment holds, remittances or adjustments may see a part of the case that the testing report never shows.

The agreement expressly based the compromise on the respective financial conditions of SNAP and the two executives. Each supplied sworn financial disclosures, and the United States relied on their accuracy and completeness in accepting the settlement. We see a settlement price shaped by what the company and executives said they could afford.

What SNAP’s Corporate Integrity Agreement Required

SNAP and its founder also entered a corporate integrity agreement with the HHS Office of Inspector General, effective June 1, 2022, with a five-year term. It required independent annual review of paid Medicare and Medicaid healthcare claims for medical necessity, documentation, coding, submission and reimbursement. It also required written review and approval procedures for referral arrangements and policies addressing promotional activity.

The claims-review instructions reached the records an employee would recognize. Reviewers were to examine the supporting documents and, for an overpaid claim, the systems and processes that generated it. If SNAP could not produce supporting documentation for a sampled paid claim, the review was to treat its reimbursement as an overpayment. The sample could not be repaired by replacing that claim with another one.

The Inspector General’s status entry lists the corporate integrity agreement as suspended on October 1, 2026. That entry concerns the oversight agreement, a separate action from the earlier suspensions of program payments to SNAP.

The Whistleblower Share Followed the Recovery

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. SNAP’s agreement tied each whistleblower payment to the United States receiving the corresponding company or executive settlement payment.

What the Order, Report and Claim Show Together

The extra-night allegation turns on a comparison between the treating order, the reason for additional testing, the recordings and the claim lines. The referral allegation adds another comparison: who supplied the interpretation or other benefit, who received it and what business followed. We work with the person who understands the records to connect those decisions to the money requested from a public program.

Different jobs reveal different parts of that chain. A technician or scorer may know the recording interval and whether usable data existed. An interpreting professional may know who reviewed the recording and which report reached the referring practice. A billing or account employee may see the code, units, payment, copay or commission attached to the same service.

The Sleep Solutions settlement illustrates another mismatch between the service and the claim. The Justice Department alleged that the company billed home, self-administered studies as technologist-attended testing to increase reimbursement and billed programs that did not cover those home tests at the time. That allegation concerns the setting and attendance. In SNAP’s settlement agreement, the United States alleged additional tests without the orders or necessity to support them.

You Know How the Extra Night Reached Billing

If you saw extra nights added to claims, unsigned interpretations offered to referring practices or commissions tied to paid tests, speak with our whistleblower experts about what happened inside the business. We build the case with you around the testing, referral and payment evidence, bring in sleep-testing whistleblower lawyers who understand those connections, and stay beside you through the pursuit of a recovery.