Durable Medical Equipment Fraud Defense Lawyer

Durable Medical Equipment Fraud Defense Lawyer in NYC

Durable medical equipment encompasses a range of essential items such as mobility scooters, prosthetics, back braces, hospital beds, and other reusable equipment used in the treatment of the ill or injured. Insurance coverage, including Medicare and Medicaid, may extend to the costs associated with durable medical equipment. However, certain qualifying criteria must be met for insurance providers to cover the equipment prescribed by doctors or needed by patients.

It is important to note that engaging in fraudulent activities, such as submitting claims for non-covered equipment or providing false or misleading statements to obtain payments for durable medical equipment, is illegal. Violators may face criminal charges at the federal level, while those involved in making false statements may also face charges at the state level. Additionally, civil lawsuits are frequently pursued to recover improperly obtained funds.

If you or your organization finds itself accused of durable medical equipment fraud, it is crucial to address the situation with a proactive and strategic approach. Sosinsky Law is here to assist you. Our experienced federal criminal defense attorney possesses the knowledge and expertise necessary to represent clients in durable medical equipment fraud cases, both in criminal and civil matters.

What is Durable Medical Equipment Fraud?

Medicare and certain other insurers should cover durable medical equipment if it is provided by a supplier enrolled in a Durable Medical Equipment (DME) program and if the patient meets the specified criteria for that particular item. Fraud can occur when there is an attempt to mislead, including making material misstatements or omissions, related to the provision or billing for durable medical equipment.

Examples of DME fraud include:

  • Suppliers offer free equipment to patients, while actually billing Medicare for it.
  • DME suppliers refer patients to doctors who prescribe unnecessary medical equipment.
  • Doctors or care providers prescribe and provide patients with unnecessary medical equipment without their request or need.
  • Providers bill for DME that patients did not receive.
  • Companies bill for duplicate orders of durable medical equipment.
  • Suppliers or providers bill Medicare for durable medical equipment for deceased patients.
  • Suppliers bill for costly name-brand products but provide patients with generic and more affordable alternatives.
  • Older adults covered by Medicare allow doctors or DME suppliers to use their Medicare number and bill for durable medical equipment in exchange for financial compensation or other benefits.

Under the law, kickbacks are deemed illegal. Therefore, if a DME supplier compensates doctors for prescribing medical equipment that is later billed to Medicare, they may be held criminally accountable for committing durable medical equipment fraud.

Common Legal Issues DME Providers Face

1. Medical Marketing

Many DME companies use marketing arrangements that violate federal law. Business development is crucial for any company’s survival. However, healthcare industry restrictions are complex. For instance, classifying a marketer as a W2 employee or a 1099 contractor can determine if a DME company violates the federal Anti-Kickback Statute. This statute prohibits certain compensation structures for referring federally-funded patients. Commissions, percentage-based compensation, and individual rewards are generally prohibited.

Another issue is that many DME companies lack written contracts with their marketers, which federal authorities view as non-transparent. To avoid scrutiny, structuring Medicare-compliant marketing compensation arrangements is vital for compliance.

2. Buying Medicare Leads

In addition to traditional marketing efforts, some DME providers and businesses buy leads from online companies. These lead-generation businesses have large databases of patients who may qualify for DME based on records of past surgeries, pain management visits, and other indications. Buyers receive patient information to contact and verify the lead. With the booming DME market, a single lead can cost up to $500 in certain areas.

However, buying leads carries risks. The DOJ has a track record of prosecuting lead agencies, DME companies, and others for using individuals’ personal information for medical services. These prosecutions typically focus on two main issues:

  • HIPAA Violations – The primary concern, albeit a minor one, pertains to HIPAA regulations. HIPAA safeguards confidential patient data against unauthorized disclosure. To “trade” such information, explicit patient consent and a written agreement are indispensable prerequisites. Unfortunately, online lead companies rarely possess such documentation.
  • Anti-Kickback Statute Violations – A major concern when it comes to buying or selling leads is that both the CMS and the DOJ view these transactions as violations of the federal Anti-Kickback Statute. If your DME business is purchasing Medicare leads or if you’re considering doing so, it’s crucial to reach out to Sosisnky Law right away. He can help ensure that your arrangement complies with the Anti-Kickback Statute and is properly documented in a legally sound contract.

3. Medical Necessity

Success in healthcare hinges on improving the patient’s condition. While marketing is important for running a DME business, it’s crucial to avoid crossing the line into patient brokering or convincing patients to buy unnecessary devices. Assessing medical necessity is often overlooked in the industry, with DME companies deferring the decision to doctors. However, the DOJ scrutinizes the entire process, similar to their approach with compound pharmacies. To protect your DME business from allegations, it’s essential to seek experienced legal counsel from our DME fraud defense attorney in NYC. Sosinsky Law has developed effective defense strategies against federal healthcare fraud investigations. Don’t risk your business, reputation, or freedom – contact our office to ensure you’re not at risk of federal prosecution.

4. Telemedicine

Telemedicine poses compliance challenges for DME businesses. While the benefits are recognized, laws have not fully adapted to its widespread use, especially for Medicare patients. Current regulations compare telemedicine to traditional office visits, but the nature of telemedicine differs significantly. This has led to legal complexities and recent cases of fraud. It is crucial for DME companies utilizing telemedicine to proceed cautiously and seek legal advice to mitigate liability risks. Contact Sosinsky Law for guidance on navigating telemedicine arrangements and safeguarding your DME business.

5. No Compliance Program

Compliance mistakes in running a DME business are not just possible but very likely and common. Each business owner must decide: Do I risk errors? Or, do I sleep well knowing I have the necessary documentation and agreements to protect against criminal allegations in a federal investigation?

Assuming that the government will believe your good intent and lack of knowledge in overbilling Medicare won’t help. No brain x-ray will determine your character. In healthcare, the second most regulated industry in the US, the burden of proof is on you. While the government has the burden of proof in court, this only happens after arrest and indictment.

Penalties for Durable Medical Equipment Fraud

Perpetrating durable medical equipment fraud can lead to severe consequences, including criminal charges for a range of federal healthcare fraud offenses, health insurance fraud, or kickback fraud. Healthcare professionals, patients who knowingly participate in fraudulent activities using their Medicare number, and other individuals may face imprisonment if convicted under federal or state anti-fraud laws. Moreover, companies, including DME suppliers, may also be subject to criminal prosecution, resulting in substantial penalties such as significant fines.

Aside from potential criminal prosecution at both the federal and state levels, those accused of durable medical equipment fraud may also find themselves entangled in civil litigation. Whistleblowers have the opportunity to file qui tam lawsuits, wherein they stand to gain a portion of the money recovered by the government in fraud cases. Furthermore, the government itself may initiate a civil claim to recoup funds that were wrongfully disbursed due to fraudulent claims.

Contact Our Federal DME Fraud Defense Lawyer Now

At Sosinsky Law, Frederick Sosinsky provides highly skilled defense in DME fraud cases. We are here to assist you and your company in avoiding or fighting a federal prosecution. To ensure the safe and confident growth of your business, reach out to our office today. Discover how we can provide guidance and discuss the next steps moving forward.

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Case Results
A successful contractor was arrested and charged with felony possession of a loaded firearm and Class C felony possession of marijuana based upon the seizure of these items in a search pursuant to warrant. As has been well advertised, in almost all gun cases in NYC, prosecutors will insist on state prison sentences even for those willing to plead guilty. After presentation of mitigating evidence however, Mr. Sosinsky was able to negotiate a sentence of nine months in jail for his client, meaning his client was out in six months.
A young man who had been a heralded star high school hoopster in Brooklyn was indicted as part of a large multidefendant fraudulent check cashing conspiracy. The client unfortunately had previously been involved in a similar prosecution and worse yet had been arrested during the pendency of the federal case for yet again committing a similar offense. Notwithstanding these hurdles, Mr. Sosinsky was able to convince the federal judge to spare his client a prison sentence and allow him to earn his freedom while on probation.
Mr. Sosinsky represented a prominent attorney accused of assaulting and endangering the welfare of his 13 year son. It turned out that the child was being used as a pawn by the client’s ex-wife and that the incident at the heart of the case involved proper disciplining of a difficult and, at times, violent child. Eventually, the charges against the lawyer were dismissed.
Mr. Sosinsky obtained a verdict of not-guilty of murder in the execution style shooting of a young man involved in gang activities in Harlem, New York City. By demonstrating important differences in the description of the shooter from witnesses called by the prosecution, Mr. Sosinsky was able to raise valid doubts about the correctness of the identifications made at trial.
A few years back, Mr. Sosinsky represented a Manhattan man who was arrested after stabbing his wife in the neck numerous times with a knife in their Upper West Side apartment. The client was indicted for attempted murder. However, after having the client examined by a forensic psychiatrist, it became evident that a compelling insanity defense was in order. Eventually, the prosecutors involved were unable to adequately prepare to counter this defense and the case was dismissed.
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