Wednesday, October 23, 2013
Justice Department announces $12 million health-care fraud settlement with mail-order diabetic supply company, owners
The Justice Department on Tuesday announced a $12 million settlement with a mail-order diabetic supply company and its owners who have agreed to pay the fines to resolve civil and criminal health-care fraud charges stemming from an investigation into a kickback scheme involving Medicare and Tricare.
Owners of Kansas-based Global Medical and parent company Global Medical Direct, Robert Shea and Mark Franz, agreed to pay $7 million to settle charges that they submitted false claims to the government health care programs.
The companies also agreed to pay $5 million in proceeds to resolve a civil enforcement action.
The announcement came from New Orleans U.S. Attorney Kenneth Polite, whose office worked with federal prosecutors in Kansas, where the companies are based. The Office of Inspector General for the U.S. Department of Health and Human Services and the FBI worked on the investigation.
Shea and Franz are barred from participating in any federal healthcare program for 20 years as part of the deal, the Justice Department said.
Authorities said the investigation found that between April 2008 and January 2012, the owners engaged in a kickback scheme by entering contracts with marketing and insurance brokerage companies with a high percentage of diabetes patients that were referred for diabetic supplies. The federal anti-kickback statute makes it illegal to pay or get payment for patient referrals because of the potential for billing abuse of programs such as Medicare, the Justice Department said.