More bad news for AmMed

Thursday, May 24, 2012

NASHVILLE, Tenn. – AmMed Direct will pay $18 million to settle claims that it used a “bait-and-switch” scheme for diabetes testing supplies.

From September 2008 to January 2010, AmMed is accused of advertising free cookbooks to get Medicare beneficiaries to contact AmMed, stated the U.S. Attorney’s Office in an April 13 press release. Once it was confirmed that the caller was a Medicare beneficiary, company representatives tried to sell them supplies, and then billed Medicare for the supplies.

“These types of deceptive marketing practices are a type of ‘bait and switch’ that are designed to trick the most vulnerable members of our society,” stated Derrick Jackson, special agent in charge of the U.S. Department of Health and Human Services—Office of Inspector General in Atlanta. Further, many beneficiaries returned the unwanted supplies to AmMed, but the provider did not refund money to Medicare and TennCare in a timely manner. It began repaying the money before learning of the investigation, according to the release.

AmMed will also pay $2.8 million to Bryan McNeese, a former AmMed employee who filed a whistleblower suit under the qui tam provisions of the False Claims Act.