It's true: Prosecution for fraud on the rise

Friday, March 31, 2006

Q. I have heard that the federal government has recently stepped up prosecuting DME suppliers for various violations like paying kickbacks or submitting false claims. Is there anything suppliers should be particularly careful about?
A. Healthcare fraud enforcement has increased substantially over the last few years and DME companies have been significant targets. The government believes that some DME companies are involved in illegal schemes. In response, the government has increased prosecution of DME companies for violating healthcare statutes like the False Claims Act and the Anti-Kickback Statute. For example, physicians and DME companies have been convicted of conspiring to defraud the Medicare program. The scheme requires a DME company to pay recruiters to locate Medicare beneficiaries to serve as "patients." Then the physician falsely certifies a diagnosis, signs a CMN requiring certain medical equipment and pays the "patients" for their cooperation. The CMN is then sent to the DME company, which bills Medicare for the unnecessary medical equipment.
Although most individuals involved in these schemes knowingly defrauded the government, many DME suppliers find themselves in this situation unintentionally.
For DME suppliers to avoid non-compliance of statutes, they need to:
- Be familiar with fraud and abuse laws;
- Monitor compliance with the statutes, regulations and manuals;
- Implement compliance programs;
- Encourage communication within the organization; and
- Consult with competent counsel.


Lester Perling is a partner with Broad and Cassel in Ft. Lauderdale, Fla. Reach him at (954) 745-5261 or