by Ben Vernia | September 8th, 2016
On September 7, the Department of Justice announced that two diabetic supply companies, their owners and presidents had agreed to pay a combined $12.2 million to settle civil allegations that the companies violated the Medicare Anti-Solicitation Statute’s prohibition against cold-calling beneficiaries. According to DOJ’s press release:
U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc. and the two owners and presidents of those companies have agreed to pay the United States more than $12.2 million to resolve allegations that they violated the federal False Claims Act by using a fictitious entity to make unsolicited telephone calls to Medicare beneficiaries in order to sell them durable medical equipment, the U.S. Department of Justice announced. U.S. Healthcare Supply LLC, based in Milford, New Jersey, has agreed to pay more than $5 million, and Jon P. Letko, its owner and president, has agreed to pay more than $1 million. His brother, Edward J. Letko, the owner and president of Oxford Diabetic Supply Inc., a medical equipment supplier that allegedly also participated in the scheme, has agreed to pay $6 million plus interest.
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The settlement announced today resolves allegations that U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc. set up and controlled an entity called Diabetic Experts Inc., which they used to make unsolicited telephone calls to Medicare beneficiaries in order to sell them durable medical equipment. The companies submitted claims to Medicare for the equipment that they sold based on these unsolicited calls. This conduct violated the Medicare Anti-Solicitation Statute.
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