Trucare Medical Equipment Services: Supplies Billed Without the Need or the Delivery

In the Trucare Medical Equipment fraud case, the owner admitted in his guilty plea that he billed Medicare for equipment and supplies that were generally medically unnecessary or never provided. Two products carried the scheme. Nutrition products that Medicare limited to patients with feeding tubes were billed for beneficiaries who, with one exception, had none. So-called arthritis kits were billed at about $4,000 each while patients received less expensive neoprene sleeves.

The Owner’s Plea and the Supplier’s Business

The Justice Department’s November 2, 2009 account of the guilty plea describes Trucare Medical Equipment Services as a Houston-area durable medical equipment company that the owner owned and operated. In his plea, he admitted that from April 2004 through July 2009 he conspired with others to submit approximately $962,000 in fraudulent claims to Medicare. He also admitted delivering only a fraction of the products he billed.

A patient recruiter, a retired nurse who referred Medicare beneficiaries to Trucare, was convicted at trial in January 2010 of conspiracy to commit health care fraud and of health care fraud itself. The Justice Department’s account of that trial shows how the forms, the billing codes and the products were chosen.

Nutrition Products Billed for Feeding Tubes Patients Did Not Have

In his plea, the owner admitted billing Medicare for enteral nutrition products that Medicare’s rules limited to patients with feeding tubes inserted or surgically implanted in the nose, mouth or stomach. Only one of the many beneficiaries he billed for those products had such a tube.

The evidence at the recruiter’s trial showed how those claims were built. The forms she supplied said that the patients she referred had feeding tubes. None of them did. She also gave the owner high-dollar Medicare codes for specialized enteral food supplements, while the patients received over-the-counter supplements, one of which said on the bottle that it was “not for tube feeding.”

Arthritis Kits Billed at About $4,000 Each

The second product line was the arthritis kit. In his plea, the owner admitted billing Medicare for medically unnecessary orthotic devices, many of them parts of these kits: braces for both sides of the body, with accessories such as heating pads, sold for arthritis-related conditions even though he knew the kits were not medically appropriate for them. He admitted billing Medicare about $4,000 per kit while giving beneficiaries inferior kits of less expensive, lightweight neoprene sleeves, often the wrong size.

At the recruiter’s trial, the evidence showed that she gave the owner a product list of inexpensive, soft, over-the-counter goods for the kits, together with billing codes that belonged to expensive, rigid, high-end orthotics. Two beneficiaries testified that they refused the kits at first and that the recruiter then offered them $100 to accept.

The Recruiter’s Cut and the Signed Forms

In his plea, the owner admitted that in August 2004 he agreed to pay the recruiter for referring Medicare beneficiaries, whom Trucare then supplied and billed. At her trial, he testified that he agreed to pay her 10% of what Medicare paid Trucare for each patient she referred, and that he paid her $300 per patient. The trial evidence also showed that she supplied phony certificates of medical necessity signed by a Houston-area physician, so that Trucare could bill Medicare. One beneficiary testified that she had never heard of the physician who signed the form supplied to Trucare.

Each part of that arrangement left a trace inside a small supplier: referral forms claiming feeding tubes, codes handed over with a product list, neoprene sleeves where rigid braces were billed, certificates signed by a doctor the patients did not know, and payments to the person bringing in patients. Anyone who handled intake, stock, delivery or billing would have seen at least one of them.

The Same Machinery, a Different Product

Trucare’s case was itself a Medicare Fraud Strike Force case, brought in Houston, the program’s fourth location after Miami, Los Angeles and Detroit, and investigated by the FBI and the HHS Office of Inspector General. Arthritis kits and enteral nutrition were among the products at the center of the Strike Force’s early cases, alongside power wheelchairs and diabetic shoes. In 2009, its Houston actions named arthritis kits, power wheelchairs and enteral feeding supplies among the schemes charged. By the government’s April 2019 enforcement action, orthotic braces had become the principal product of telemarketing schemes. Recruiting the patients, producing the paperwork and choosing the code carry over from one product to the next, so someone who recognizes Trucare’s pattern may be seeing it under a different code.

Valley Home Medical and the Same Billing Failures

Valley Home Medical Supply agreed to pay $565,873 to resolve allegations that it knowingly billed federal health care programs for medically unnecessary supplies and supplies never delivered to patients. The Justice Department announced that civil settlement on November 4, 2020. The claims concerned Medicare and TRICARE, and the Canoga Park, California supplier allegedly billed this way from July 2006 until May 2013.

A former employee brought the False Claims Act case. The announced whistleblower share was 22% of the settlement proceeds. The same kinds of billing failures described in the Trucare admission appeared in a civil case brought by someone who had worked inside a supplier. Trucare’s owner admitted conduct in a criminal plea, while Valley Home Medical settled the government’s allegations.

That is why this comparison matters to an employee. Unnecessary supplies and missing deliveries can be the substance of a civil whistleblower case, with a share of the recovery for the person who brings it. The employee’s view of the business can connect patient complaints, orders and billing decisions that otherwise sit apart.

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

You Know What Reached the Patient

If the supplies on the claim do not match the care or delivery you saw, speak with our whistleblower experts about the supplies billed but never needed or delivered. We build your strongest durable medical equipment whistleblower case with you, bring in healthcare fraud whistleblower lawyers who understand supplier billing, and stay beside you through the pursuit of a recovery.