Statutory Violations of DME Suppliers
Durable medical equipment (DME) suppliers face a variety of regulatory challenges. Each year, state and federal agencies, charge many DME suppliers, including physician and non-physician suppliers, with violating healthcare regulations.
This article provides a brief summary of some of the violations federal government charged against DME supplier in 2020.
HIPAA Violation.
On October 2, 2020, Mr. Nathan LaParl and Stefanie Hirsch were charged with HIPAA statute violation because Ms. Hirsch allowed Mr. LaParl to improperly access and check Medicare patients’ insurance eligibility through a patient eligibility tool provide by Ms. Hirsch’s company, EI Medical, Inc. Mr. LaParl paid Ms. Hirsch $0.25 per patient eligibility check.
Mr. LaParl was selling Medicare patients’ personal and medical data to a third party, who in turn was submitting falsified claims to Medicare using the data submitted by LaParl.
Kickback for Leads.
On June 11, 2020, Daniel Craig Hallman was accused of receiving a percentage of the profit (kickback) from a DME company in exchange for supplying leads. The company then billed Medicare for the DME. Mr. Hallman conspired with others to collect and sell identification and insurance information of persons who may need DME.
Telemedicine Kickback.
On April 23, 2020, Charlene Frame, owner of a telemedicine network through Royal Physician Network, LLC and Envision It Perfect, LLC was charged for conspiring to pay medical providers in exchange for obtaining orders for DME. The DME orders were ultimately billed to Medicare.
Overcharging (inflating bills) Medicaid.
On May 29, 2020, Paulette Jackson was sentenced to four years in prison for committing fraud on VA Medicaid program. Ms. Jackson, who owned and operated United Medical Home Oxygen & Medical Supply, grossly inflated the amounts she reported to Medicaid as her actual costs of oxygen.
Submitting Fraudulent Claims to Medicare.
On September 30, 2020, Jessica Jones and Elizabeth Putulin plead guilty for conspiring with a third individual to submit more than $109 million in false and fraudulent claims for DME.
Medically Unnecessary DME.
On January 14, 2020, James L., Crabb, M.D. was charged for conspiracy to defraud Medicare for DME that was not medically necessary, not provided as represented, and not reimbursable. Additionally, orders and prescriptions were procured through kickbacks and bribes.
Dr. Crabb, a Tennessee and Mississippi physician, served as a consultant for a Florida-based telehealth marketing company and a Georgia physician staffing company. The Companies allegedly provided orders and prescriptions for DME to Dr. Crabb who signed them without any pre-existing doctor-patient relationship without physician examinations. Dr. Crabb signed the orders only after speaking briefly with the Medicare beneficiary over the phone, or without any conversation at all. In some instances, he paid an unlicensed assistance cash to sign the prescriptions, or in other cases, signed for patients located in states in which he does not hold a license to practice medicine.
2020 Historic Kickback Takedown.
In one of the largest nationwide takedowns, federal prosecutors brought charges against 345 individuals, including more than 100 medical professionals, for submitting more than $6 billion in false and fraudulent claims to federal health care programs and private insurers.
This large scheme included fraudulent claims involving telemedicine schemes, substance abuse facilities known as “sober home,” and illegal opioid distribution and other health care fraud.
The telemedicine scheme involved defendant executives paying physicians and nurse practitioners to order unnecessary DME, genetic and other diagnostic testing, and pain medications with little or no patient interaction. The orders were then sold to DME companies, genetic testing labs, and pharmacies in exchange for illegal kickbacks, resulting in submission of false claims to federal healthcare programs.
The “sober home” case involved physicians, owners and operators of substance abuse treatment facilities, and patient recruiters. These individuals were charged for allegedly participating in kickback scheme for patient referrals, subjecting those patients to medically unnecessary drug testing, and billing for therapy sessions that were not provided.
Other schemes that were uncovered by this investigation include illegal prescription and distribution of opioids and submitting claims for treatment that were medically unnecessary or never provided.
