Virginia Sleep Centers Violate False Claims Act

False Claims Act , Healthcare Fraud

Sleep labs serve as vital sources of care for those suffering from a variety of sleep disorders, including obstructive sleep apnea (OSA). An estimated 22 million Americans show symptoms of moderate to severe OSA, which can only be treated following a series of in-home or in-lab sleep studies that diagnose and effectively manage the disorder. These tests are often covered by government healthcare programs, including Medicare and Medicaid, if they are proven to be medically necessary.

In this knowledge, the former owner of two Virginia-based sleep study corporation offered financial compensation to physicians who provided referrals for testing, regardless of medical necessity. During the nine-year scheme, the owner also facilitated the submission of a variety of false claims in which he purposefully influenced patients to undergo multiple sleep studies that were unauthorized by any provider. In the pursuit of undue government reimbursements, he and an employee falsified insurance claim forms and forged physician signatures to create the illusion that these tests were legitimate and necessary.

The two corporations involved, 1st Class Sleep Diagnostic Center and 1st Class Medical, offered sleep-related treatments throughout Maryland and Northern Virginia. The primary source of the fraudulently obtained revenue came from the variety of sleep studies performed in these clinics – studies that are quite costly to government healthcare programs. The two tests most commonly performed at these clinics cost Medicare and Medicaid between $648 and $691 per test, with this scheme costing the two programs over $1 million in losses between 2005 and 2014.

Sleep laboratories are on the rise, and the government is taking note – the Office of the Inspector General is performing more frequent audits on these testing facilities in order to prevent fraudulent billing practices that may lead to such grandiose schemes. Multiple instances of sleep centers billing for unallowable services have been uncovered through these audits, but the government often relies on information from those who become privy to the existence of improper practices. The signs of sleep center fraud are often concealed by those who perpetrate it, but with the help of whistleblowers, we aim to bring those who defraud these healthcare programs to justice.

Whistleblower Justice Network Can Help You

Whistleblower Justice Network partners with whistleblowers who prioritize moral responsibility over financial gain in an effort to bring those who violate the False Claims Act to justice. We believe that the pursuit of the truth should always take priority, especially when it involves protecting those who may be victimized by these schemes.

If you have meaningful information regarding sleep center fraud that you believe is in violation of the False Claims Act, Whistleblower Justice Network can help. Working alongside world-class legal counsel, we will ensure you are protected to the fullest extent of the law and that you receive credit for the information you bring to the U.S. government. Partnering with whistleblowers is all we do. Visit us at, or call us at 844-WJN-4ALL.

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