It is common knowledge in the Durable Medical Equipment (DME) industry that a DME provider must not bill Medicare Part B for DME provided to patients in Medicare-certified Skilled Nursing Facilities (SNFs). Indeed, for over twenty years, HHS-OIG has raised concerns that DME providers regularly submit false Medicare Part B claims that misrepresent that their equipment was provided to patients in their home or in a facility used as a home when, in fact, they were in Medicare-certified SNFs.

This scheme was most recently uncovered in an intervened False Claims Act action against DME provider Dynasplint Systems, Inc. In this case, the government alleges that since 2006, the company specifically focused its sales force on SNFs, and then falsely billed Medicare Part B for DME sold to these facilities. According to the government, in 2009, data showed that approximately one-half of Dynasplint’s Medicare billings to DME Medicare Administrative Contracts were for patients Dynasplint represented were in “custodial care” facilities, as opposed to SNFs. This number raised a red flag, because during the same time period, looking at other DME suppliers, less that 0.1% had billed Medicare Part B for patients in custodial care.

In effect, dishonest DME providers cause Medicare to be double-billed when they bill Medicare Part B for DME provided to patients in SNFs. The SNFs charge Medicare Part A or Medicaid a daily rate per patient, and this rate includes the cost of DME used by its patients. Any separate additional DME claim for SNF patients under Medicare Part B is duplicative, and when done knowingly, is health care fraud.

More information for whistleblowers is located at the Nolan Auerbach website.