“Brace Yourself”: Durable Medical Equipment Fraud is Big Business

October 8, 2021

Durable medical equipment (DME) fraud is one of the leading ways that suppliers and physicians defraud Medicare, Medicaid, and TRICARE. DME is defined as supplies or equipment ordered by a health care provider for everyday or extended use. Examples might include neck, back, or leg braces; wheelchairs; walkers; scooters; oxygen equipment; hospital beds; crutches; or even blood-testing strips for diabetics. Unscrupulous players have found several ways to steal money from the federal government using DME, including:

  • Soliciting patients to accept (or tricking them into “ordering”) DME they don’t need, then billing a government program;
  • Paying kickbacks for doctors to refer their government-insured patients;
  • Using forged medical records or prescriptions to bill government programs;
  • Billing for more expensive items than what is actually provided (“upcoding”); and
  • Using stolen patient or physician identities to submit false claims

Unfortunately, DME fraud is often committed by fly-by-night operators who are difficult to track down and hold responsible. Nevertheless, the Department of Justice (DOJ) aggressively prosecutes DME scams, and it counts on courageous whistleblowers for their help. For instance:

  • In April 2019, the FBI and the Inspector General of Health and Human Services, in a coordinated effort code-named “Operation Brace Yourself,” brought charges against numerous telemedicine companies and DME suppliers across New Jersey, Florida, Texas, Pennsylvania, California and South Carolina. Most are accused of benefiting from illegal kickbacks and bribes in exchange for referring DME orders to equipment providers. Many of these criminal cases are still working their way through the courts; meanwhile, as a result of the operation, the Centers for Medicare and Medicaid Services (CMS) took administrative action against 130 DME companies that had submitted more than $1.7 billion in fraudulent claims and had received undeserved reimbursements totaling more than $900 million.
  • More recently, DOJ announced that Arriva Medical, a mail-order diabetic testing supplier, and its parent company Alere Inc. have agreed to pay $160 million to settle allegations that they paid kickbacks to Medicare beneficiaries by providing them “free” or “no cost” glucometers and by routinely waiving copayments, and that they submitted false claims to Medicare on behalf of deceased patients. According to the DOJ’s press release, “Paying illegal inducements to Medicare beneficiaries in the form of free items and copayment waivers can result in overutilization and the wasting of taxpayer funds.” The whistleblower who stepped forward was a worker in an Arriva call center who decided to report what he saw happening. He will receive a percentage of the $160 million the government recovers.

If you’re aware of a DME scam, don’t think you can’t do anything about, or that it doesn’t really matter – you can, and it does. The False Claims Act provides a mechanism to bring a lawsuit on behalf of the government and potentially receive a portion of the government’s recovery.  Talk with the experienced whistleblower attorneys at Brown, LLC today to see if you have a case.