Durable Medical Equipment (DME)

power wheel chair fraudNelson Hardiman represents California durable medical equipment companies (“DME companies”) and other companies that provide prosthetics, orthotics, and supplies. The Centers for Medicare & Medicaid Services (CMS) have identified DME as vulnerable to fraud and are particularly active in pursuing DME suppliers for allegedly fraudulent practices. In fact, it has been reported that roughly 20% of the investigations conducted by Senior Medicare Patrol in California alone are related to durable medical equipment scams. Classic examples of DME fraud, waste, and abuse include selling medically-unnecessary prescriptions and DME companies recruiting patients and then billing Medicaid for more expensive equipment than what is delivered.

Recently, a federal jury in Los Angeles found one owner of a medical supply company guilty of four counts of health care fraud amounting to $3.3 million in false and fraudulent claims to Medicare. Among other things, the government charged  the DME supplier with kickbacks to medical clinics for fraudulent prescriptions for durable medical equipment, such as expensive power wheelchairs that were allegedly unnecessary because the beneficiaries were able to walk without assistance. The supplier was also found to have generated false documentation to support the fraudulent claims, including fake home assessments and photocopied beneficiary signatures. Such attention to wheelchair suppliers is not new. The Office of Inspector General (“OIG”) has previously determined that upwards of sixty-one percent (61%) of power wheelchairs provided to Medicare beneficiaries were either medically unnecessary or were not supported by sufficient documentation to support the claim. In many cases, provider claims were challenged for lack of sufficient documentation to validate medical necessity. Other claims were attacked for providing the wrong type of wheelchair and others allegedly sought mobility-assistance equipment that was more expensive than necessary.

Nelson Hardiman counsels understands the DME space and provides DME companies with turnkey representation across a wide range of business, regulatory, and strategic challenges, including:

  • Business Transactions – including forming businesses, drafting purchase and sale, wholesale and employment agreements;
  • Regulatory Defense – handling reimbursement audits by private and governmental payors and their contractors, and fraud and abuse investigations by government payors and their contractors;
  • DME Compliance –  such as licensing, operational, and reimbursement compliance, Medicare and Medi-Cal enrollment and changes of ownership, HIPAA and state patient data privacy and security requirements; and
  • Litigation – including Medicare enrollment and claim denial appeals, overpayment appeals involving power wheelchairs, electric hospital beds, infusion drugs and supplies, etc., exclusion and suspension appeals, False Claims Act civil defense and general business litigation.