A Maryland-based company that provides splints to nursing homes throughout the U.S. will pay the government $10.3 million to resolve a False Claims Act lawsuit filed by a whistleblower who alleged the company committed Medicare fraud by lying about the patients using its splints.
According to the complaint, Dynasplint Systems and its founder and president, George Hepburn, falsely billed Medicare for splints used by patients in Medicare-certified nursing facilities by misrepresenting that the patients using the splints resided in their own homes.
Patients staying in nursing homes, or their insurers such as Medicare, make a bundled payment to the facility that covers all of a patient’s needs, including items as splints and other necessities; thus no separate Medicare reimbursement for those devices is permitted.
Former Dynasplint sales executive Meredith Deane filed the lawsuit under the whistleblower provisions of the False Claims Act, which authorize individuals to sue on behalf of the federal government and share up to 30 percent of any recovery. Ms. Deane will receive at least $1.98 million (about 19 percent) of the settlement, the U.S. Justice Department said in a statement Friday.
The Justice Department said that the Department of Health and Human Services and the Centers for Medicare and Medicaid Services suspended payments to Dynasplint in August 2013 based on the allegations of Medicare fraud, which they investigated and found to be credible.
As part of the settlement, Dynasplint and Mr. Hepburn have agreed to forfeit about $8.5 million in funds withheld when federal authorities withheld payments.
“The civil False Claims Act is a valuable weapon in our office’s arsenal to combat abuse of federal health care funds here in the Eastern District of Louisiana and nationwide,” said U.S. Attorney Kenneth Allen Polite Jr., who helped persecute the case in the the Eastern District of Louisiana. “The favorable resolution and settlement of the claims in this case serve as a reminder to all in the industry to stay vigilant for signs of waste and abuse by providers in our health care markets.”
Source: U.S. Department of Justice