Maryland splint company pays over $10 million to settle whistleblower’s False Claims Act allegations

by Ben Vernia | January 5th, 2016

On December 18, the Department of Justice announced that a Maryland company had agreed to pay over $10 million to settle civil claims, originally filed by a whistleblower, that the company defrauded Medicare in connection with claims for splints provided in skilled nursing facilities. According to DOJ’s press release:

Maryland-based splint supplier Dynasplint Systems Inc., and its founder and president, George Hepburn, have agreed to pay approximately $10.3 million to resolve allegations that they violated the False Claims Act by improperly billing Medicare for splints provided to patients in skilled nursing facilities, the Department of Justice announced today.

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The government alleged that Hepburn and Dynasplint knowingly mischarged Medicare for splints used by patients in Medicare-certified skilled nursing facilities.  Patients staying in skilled nursing facilities, or their insurers such as Medicare, pay a bundled payment to these facilities that cover all of a patient’s needs, including such items as splints, and thus no separate Medicare reimbursement for such devices is permitted.   To circumvent Medicare rules, defendants allegedly mispresented that patients were in their homes or other places that were not skilled nursing facilities.

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The whistleblower, a former Dynasplint sales executive, will receive $1.98 million of the settlement (a 19.2% relator’s share), DOJ announced.

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