Milford, N.J.-based U.S. Healthcare Supply and the owner of Milford-based Oxford Diabetic Supply have agreed to pay the federal government a total of $12.2 million to resolve allegations they violated the False Claims Act, according to the Department of Justice.
The government alleges the two companies violated the Medicare Anti-Solicitation Statute by using a fictitious entity called Diabetic Experts to make unsolicited telephone calls to Medicare beneficiaries to sell them durable medical equipment. The companies allegedly violated the False Claims Act by submitting claims to Medicare for the equipment they sold based on the unsolicited calls.
"Cold-calling people to sell them expensive medical equipment is prohibited for a reason: unsuspecting patients shouldn't be coerced into making medical decisions about devices and equipment — which they may not even need — on the basis of a sales pitch," said U.S. Attorney Paul J. Fishman for the District of New Jersey.
To resolve the allegations, U.S. Healthcare Supply agreed to pay the federal government more than $5 million, and the company's owner and president agreed to pay more than $1 million. The owner of Oxford Diabetic Supply agreed to pay $6 million plus interest to settle the allegations, according to the DOJ.
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