American Sleep Medicine to Pay More $15.3 Million For Fraud

The federal government recently settled a $15 million False Claims Act (FCA) case against American Sleep Medicine LLC, according to a recent Justice Department press release. In particular, American Sleep Medicine will pay $15,301,341 to resolve Medicare fraud and TRICARE fraud allegations that it charged for ineligible sleep diagnostic services.

According to the release, American Sleep “owns and operates 19 diagnostic sleep testing centers throughout the United States, including in Alabama, California, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Maryland, Missouri, New Jersey, Tennessee, Texas and Virginia.” Its primary business “is to provide testing for patients suffering from sleep disorders such as obstructive sleep apnea. The test results are used by doctors to determine the most appropriate course of treatment for patients. The most common tool used to diagnose sleep disorders, particularly sleep apnea, is a procedure called polysomnographic diagnostic sleep testing.” But the federal government’s requirements for reimbursement for this require that initial sleep studies be conducted by licensed technicians or technicians certified by a state or national credentialing body. According to the allegations, brought by a qui tam relator—or whistleblower—the government was improperly billed because diagnostic testing services were performed by technicians who lacked the required credentials or certifications, when American Sleep knew this violated the law.

As a result of this FCA settlement, the relator will receive his bounty of more than $2.6 million. Also as part of the deal, American Sleep entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services, which requires “enhanced accountability and wide-ranging monitoring activities conducted by both internal and independent external reviewers.”

John Sinatra is a partner in the Business Litigation Practice at Hodgson Russ LLP. You can reach him at jsinatra@hodgsonruss.com. 

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