Matria cuts $9 million check in fraud settlement

Sunday, March 12, 2006

MARIETTA, Ga. - Matria Healthcare and its former subsidiary, Roanoke, Va.-based Diabetes Self Care (DSC), have agreed to pay $9 million to settle claims of improper billing practices for mail-order diabetes supplies.

Matria, a provider of disease management programs, sold DSC's operations in June 2004, but DSC's purchaser refused to as- e liability for the claims involved in the lawsuit. DSC formerly provided DME like blood glucose monitors and testing strips.

The settlement stems from separate whistleblower lawsuits filed by two former DSC employees: Kim Politsky, reimbursement director; and Sandra Clarke, customer service supervisor. They will receive about $1.2 million and $792,000, respectively, of the $9 million settlement.

Politsky and Clarke charged that, from Jan. 1, 1998, through Dec. 31, 2003, DSC:

- Billed Medicare prior to obtaining a valid physician's order, assignment of benefits or CMN;
- Failed to credit Medicare for returns;
- Billed Medicare for the shipment of duplicate orders, over-shipped or under-shipped DME and un-ordered DME;
- Failed to maintain required signature logs for shipments;
- Falsely created or altered documentation to support shipments;
- Failed to maintain proof of delivery;
- Falsified or changed dates of service, dates of shipment or dates of request related to shipments;
- Improperly billed Medicare for blood glucose meters;
- Made false representations regarding eligibility to participate in various state Medicaid programs; and
- Falsely billed for items shipped from a California location without a valid Medicare supplier number.

Clark's lawsuit included allegations that she was unlawfully retaliated against after raising concerns about DSC's billing practices.