Medical equipment company pays $7 million to settle whistleblower’s allegations of pricing fraud

by Ben Vernia | March 1st, 2023

On March 1, the United States Attorney for the Eastern District of Kentucky announced that Brentwood, Tennessee-based United Seating and Mobility, LLC (d/b/a Numotion) had agreed to pay $7 million to resolve civil allegations, originally brought by a whistleblower, that the company mischarged federal healthcare programs for its durable medical equipment. According to DOJ’s press release:

LEXINGTON, Ky.— United Seating and Mobility, LLC, d/b/a Numotion (Numotion) has paid $7 million to resolve civil allegations that it made false statements in connection with claims for reimbursement it submitted to Kentucky Medicaid, two of Kentucky Medicaid’s Managed Care Organization contractors (MCOs), MO HealthNet (Missouri Medicaid), and D.C. Medicaid.

Numotion is a national supplier of durable medical equipment (DME), such as hospital beds, manual wheelchairs, power wheelchairs and accessories, and gait trainers.  The investigation involved DME that was “manually priced” by Medicaid payors in Kentucky, Missouri, and D.C.  Those Medicaid programs reimbursed manually priced DME based on the cost Numotion actually paid the manufacturer for the equipment.  Specifically, in Kentucky, reimbursement is based on “a manufacturer’s actual charges” billed to Numotion, or the “invoice price;” in Missouri, reimbursement is based on the “actual invoice of cost;” and in D.C., reimbursement is based on “original documentation reflecting all discounts.”

In the Settlement Agreement, the United States alleged that Numotion did not disclose all discounts Numotion received from, or the cost Numotion actually paid to, DME manufacturers when submitting claims for manually priced DME to Kentucky Medicaid, two Kentucky Medicaid MCOs (Aetna Better Health of Kentucky and WellCare of Kentucky), MO HealthNet, and D.C. Medicaid.  Numotion’s failure to disclose all discounts, or the actual cost paid, resulted in these Medicaid programs paying Numotion higher reimbursements than it was entitled to receive.  The United States contended that the conduct violated the False Claims Act, 31 U.S.C. § 3729(a)(1)(B), a federal law that prohibits knowingly making or using a false statement material to a false claim for reimbursement. 

As part of the settlement, Numotion also entered into a 5-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General.  The CIA requires, among other things, that Numotion implement a centralized risk assessment program, as part of its compliance program, and hire an Independent Review Organization to complete annual reviews of some of its Medicare and Medicaid claims.

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The relator, a former NuMotion employee, will receive $1.05 million of the settlement (a 15% relator’s share).

Disclosure: The Vernia Law Firm, assisting Golden Law Office and Wohlander Law of Lexington, Kentucky, helped to represent the whistleblower in this case.

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