Durable Medical Equipment Company Pays $600,000 to Settle False Claims Act Allegations for Using Unlicensed Technicians for Respiratory Therapy

On January 12, 2015,  J and L Medical Services, LLC in Connecticut entered into a civil settlement agreement with the federal and state governments in which it will pay $600,000 to resolve allegations that it violated the federal and state False Claims Acts.         

J&L Medical is a durable medical equipment company.  As part of its business, it provides Continuous Positive Airway Pressure (CPAP) and Bilevel Positive Airway Pressure (BiPAP) devices and accessories to Medicare and Medicaid beneficiaries who have been diagnosed with obstructive sleep apnea.

It is alleged that J&L regularly utilized the services of unlicensed technicians to provide respiratory therapy services to Medicare and Medicaid beneficiaries, including setting up CPAP and BiPAP machines, fitting the patients with the masks used with those machines, and educating the patients about the use of the machines.

Under Connecticut law, the practice of respiratory therapy is a licensed activity.  It is alleged that the respiratory therapy services in question could only be legally performed by licensed respiratory therapists. Unlicensed practice issues are arising more frequently in audits, qui tam cases and criminal prosecutions.

To resolve the allegations under the federal and state False Claims Acts, J&L agreed to pay $600,000, which covers conduct occurring from January 1, 2008 through May 15, 2013. As part of the settlement, J&L also agreed to implement a Compliance Program intended to prevent and/or detect fraud, waste, and abuse in claims submitted by the company to the Connecticut Medicaid program.

A complaint against J&L was filed in the U.S. District Court in Connecticut under the qui tam, or whistleblower, provisions of the both the federal and state False Claims Acts.  The relator (whistleblower) was a former employee of J&L and a licensed respiratory therapist, will receive a share of the proceeds of the settlement in the amount of $102,000.

The whistleblower provisions of both the federal and state False Claims Actsprovide that the whistleblower is entitled to receive a percentage of the proceeds of any judgment or settlement recovered by the government.

Posted by Tracy Green, Esq.
Work: 213-233-2260