Friday, January 6, 2017

California Sleep Clinic Agrees To Settle False Claims Case for Billing Medicare for Diagnostic Sleep Tests. Pays $2.6 Million Fine and Loses Provider Numbers for 3 Years.

Diagnostic sleep studies have been under scrutiny and audit by Medicare and private insurers for the past 5 years. Recently, a false claims civil lawsuit resulted in a large settlement by a California sleep diagnostic clinic. 

One requirement of this recent civil settlement was that the business lose its provider numbers and not be allowed to re-enroll for 3 years. That essentially closes the business and does not allow it to be sold to a third party. Essentially, this shows the government decided it wanted this provider out of the program. 

On December 28, 2016, Bay Sleep Clinic, its related businesses — Qualium Corporation and Amerimed Corporation — and their owners and operators, Anooshiravan Mostowfipour and Tara Nader agreed to pay $2.6 million to settle allegations that they fraudulently billed the Medicare program. The claims resolved by this settlement are allegations only and there has been no determination of liability.

The allegations against the Defendants were set out in an amended False Claims Act complaint filed by the United States on August 8, 2016. According to the complaint, California residents Mostowfipour and Nader own Amerimed Corporation (that was doing business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialists) and Qualium Corporation, which operated twenty sleep clinics doing business as Bay Sleep Clinic.  

The government alleged that as early as April 2002, Mostowfipour, Nader, and their businesses fraudulently billed Medicare for sleep tests performed by technicians lacking the licenses or certifications required by Medicare payment rules.  It was also alleged that there was billing to Medicare for sleep tests that allegedly were conducted at unenrolled and unapproved locations.  

Specifically, the government alleged that defendants regularly falsified documents to make it appear that a sleep test had been given at one of the two Medicare-approved locations when, in fact, the test had been conducted at another, unapproved facility.  

Additionally, the government alleged there was billing to Medicare for medical devices in violation of Medicare rules and regulations that prohibit providers of diagnostic sleep tests from supplying medical devices and from sharing a sleep laboratory location with a durable medical equipment supplier. 

The U.S. intervened in a former employee's whistleblower action, captioned United States ex rel. Dresser v. Qualium Corp., et al., Civil Action No. 12-1745 (N.D. Cal.)  The False Claims Act allows for private persons, such as Elma F. Dresser in this case, to file actions to provide the government information about wrongdoing and then obtain a portion of the government’s recovery.  Ms. Dresser will receive approximately $545,000. As is permitted by the statute, the United States intervened in the action in May 2015 and filed its initial complaint in intervention in September 2015. 

As part of today’s agreement, the sleep clinic defendants voluntarily terminated their two existing Medicare enrollments and agreed not to re-enroll as providers or suppliers in the Medicare program for a period of three years. This is a harsh penalty as obtaining a new provider number will be very difficult with that type of administrative history.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Phone: 213-233-2260


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