Ouch! HME coughs up $1.38 million

Tuesday, November 30, 2004

TALLAHASSEE, Fla. - Doctor’s Choice Medical Equipment paid the price last summer for what appears to be a less than stellar job of due diligence.

In late July, the company agreed to pay $1.38 million to settle charges that the HME’s previous owner fraudulently billed Medicare and Medicaid.

Doctor’s Choice is part of Homecare Supply, which began rolling up a large HME company in the 1990s. Praxair acquired Home Care Supply in June for $245 million.

“It must make them sick,” said one industry insider. “It was one of the very early deals that Homecare Supply did. I guarantee you they did a better job of due diligence after that.”

Between January 1994 to December 1998, Doctor’s Choice double-billed Medicare and Medicaid for some DME items and billed for others never ordered or supplied, according to state and federal investigators.

Homecare Supply bought Doctor’s Choice in 1999. Following the deal, the roll-up discovered some of the improper billing and disclosed it to the government. An employee of Doctor’s Choice also came forward and disclosed certain other improprieties. As a whistleblower, she will receive a share of the $1.38 settlement.