Durable Medical Equipment Fraud

Durable Medical Equipment (DME) is defined by the Federal Government as “equipment which can withstand repeated use,” and “is primarily and customarily used to serve a medical purpose,” and “generally is not useful to a person in the absence of an illness or injury,” and “is appropriate for use in the home.” Under this broad definition, Durable Medical Equipment can include a vast array of items such as powered and manual wheelchairs, medical beds, oxygen equipment, and walkers. For some DMEs to be covered by a government health program, a Certificate of Medical Necessity (CMN) must be signed by a treating physician and presented by an equipment supplier or manufacturer.

DME suppliers are often among the most brazen and notorious perpetrators of fraud, waste, and abuse in the health care sector, and consequently are often the targets of FCA lawsuits and prosecutions. According to the Government Accounting Office (GAO), in 2010, DME and medical facilities cases combined made up about 40% of all criminal cases brought under the FCA.

Durable Medical Equipment suppliers can defraud the government in numerous ways, some of which include:

  • Billing for medically unnecessary equipment
  • Billing for equipment or supplies that were never provided to patients
  • Billing for services, such as periodic maintenance of medical equipment, that never was performed
  • Billing for equipment provided to patients who do not qualify for the equipment under a government health program
  • Billing for different, more expensive equipment than that which was provided to the patient (i.e., upcoding)
  • Providing equipment that is known to be defective
  • Forging physician signatures on CMNs
  • Paying kickbacks to physicians for referrals or for physicians’ signatures on CMNs
  • Engaging in improper financial relationships with physicians who refer patients

These fraudulent practices, and others, may constitute the basis for a whistleblower lawsuit under the False Claims Act.

Real World Examples of Recent Durable Medical Equipment False Claims Act Cases:

  • 2011: Hill-Rom Company paid $41.8 million to resolve allegations in a whistleblower lawsuit under the FCA that it submitted false claims regarding Durable Medical Equipment over an eight-year period. The whistleblowers, former and current sales representatives of Hill-Rom, alleged that the company submitted claims for equipment that was not medically necessary and even submitted claims for equipment provided to patients who were deceased. The whistleblowers received nearly $8 million as their share of the recovery.
  • 2007: The SCOOTER Store, Inc. paid $4 million and gave up its right to reimbursement of pending Medicare claims in order to resolve allegations that it violated the False Claims Act. Specifically, it was alleged that the company provided and billed Medicare and Medicaid for more expensive power wheelchairs that were not necessary or wanted by customers, rather than the less expensive power scooters that the company advertised. The company also allegedly sold and billed for used equipment as if it were new. The whistleblower, a former employee of The SCOOTER Store, received over $3 million as his share of the recovery.

For a free consultation about a potential Durable Medical Equipment fraud case, health care fraud, or other potential whistleblower case, please call us or click here to submit your information.