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March 14, 2013 Healthcare Fraud

Florida Sleep Testing Center Agrees to Pay Over $15 Million in Settlement

In a recent settlement with the the Department of Justice, a Florida-based sleep-testing center, American Sleep Medicine LLC, has agreed to pay more than $15 million to resolve allegations of violating the False Claims Act.  American Sleep Medicine agreed to the settlement to resolve allegations that they fraudulently billed Medicare, TRICARE and other federal health care programs for sleep diagnostic testing services that were not eligible for payment according to an official statement from the Justice Department. While Medicare is a federal health program covering United States citizens, TRICARE is a healthcare program specifically for Uniformed Service members, retirees and their immediate family members worldwide.

American Sleep Medicine is headquartered in Jacksonville, Florida. They own and operate 19 separate sleep diagnostic testing centers across the United States, including centers located in Alabama, California, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Maryland, Missouri, New Jersey, Tennessee, Texas and Virginia. The primary function of American Sleep Medicine is to provide testing services for patients who suffer from sleep disorders such as narcolepsy, sleepwalking and obstructive sleep apnea. The data obtained from these test results are used by doctors and specialists as a way to determine the most effective treatment plan for patients. One of the most commonly used diagnostic tools when testing for sleep disorders is a procedure known as polysomnographic diagnostic sleep testing. This test is particularly helpful when diagnosing sleep apnea. In order to receive reimbursement for sleep disorder testing claims that are submitted, federal program requirements clearly state that initial sleep studies must be conducted by technicians that are properly licensed/certified by a state or national credentialing bodies.

According to DOJ, American Sleep Medicine violated the False Claims Act when it submitted claims to Medicare and TRICARE between January 1, 2004, and December 31, 2011 which were fraudulent, as the diagnostic sleep tests were all performed by technicians lacking the specified credentials or certifications. The Justice Department further alleged that American Sleep Medicine was aware of the credentialing requirements and knowingly violated the False Claims Act law.

“Medicare patients and military families deserve to be treated by appropriately credentialed professionals when seeking medical care,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “When companies providing those services seek to skirt the rules, there will be a steep price to pay.”

“Pursuing health care fraud is a priority of my office and the Department of Justice. We will continue to work with the Department of Health and Human Services and the public to ensure that fraudulent claims are investigated and those responsible are required to pay,” stated David J. Hale, U.S. Attorney for the Western District of Kentucky. “Medical providers who overbill Medicare defraud the taxpayers and drive up the cost of health care for us all. Recovering taxpayer dollars lost to fraud helps keep strong those critical public health care programs so many people depend on.”

“Patients seeking care from licensed professionals deserve to receive exactly what was represented, and the taxpayer-funded Medicare program expects no less,” said Derrick Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General Region IV, which includes Kentucky. “The company has agreed to Federal monitoring and reporting requirements designed to avoid such problems in the future.”

Information regarding the fraudulent activity of American Sleep Medicine was brought to the attention of the United States government by a company whistleblower named Daniel Purnell. He filed suit under the False Claims Act in relation to the federal funds he believed American Sleep fraudulently collected in violation of the law. Purnell is a former employee who worked as a sleep technician at an American Sleep Medicine Clinic in California’s Silicon Valley. As a result of bringing the False Claims Act lawsuit against American Sleep Medicine, Purnell will receive over $2.6 million of the settlement monies, or a 17 percent whistleblower’s share.

In addition to the $15.3 million payment, American Sleep Medicine also entered into a five-year Corporate Integrity Agreement, which will require enhanced accountability and monitoring by internal and external independent reviewers.