CHICAGO — A suburban Chicago diagnostics company that provides home sleep testing will pay $3.5 million to the United States to settle a civil lawsuit accusing the company of defrauding Medicare and four other federal health care programs through kickbacks and unnecessary home sleep testing.
The suit in U.S. District Court in Chicago alleged that SNAP DIAGNOSTICS LLC, a nationwide provider of home sleep testing diagnostic services based in Wheeling, Ill.; its founder, GIL RAVIV; and its vice president, STEPHEN BURTON, violated the False Claims Act and the Anti-Kickback Statute by fraudulently billing Medicare and four other federal health care programs for medically unnecessary services and for services that were occasioned by kickbacks. The suit alleged that Raviv directed SNAP to submit claims for patients’ second and third nights of home sleep testing when, in fact, the company knew that only a single night of testing was needed to effectively diagnose obstructive sleep apnea and that it routinely tested and claimed only one night for patients with private health insurance. As a result, the suit alleged that, in addition to defrauding five federal agencies, SNAP unlawfully multiplied the copays it received from senior citizens who were Medicare beneficiaries. The suit also alleged that SNAP’s business model relied on several unlawful kickback schemes, which incentivized physicians and their staffs to refer all of their home sleep testing services to SNAP.
As part of a settlement agreement approved Friday by U.S. District Judge Mary M. Rowland, SNAP agreed to pay the United States $3.5 million, while Raviv will pay $300,000, and Burton $125,000, for a total settlement amount of $3.925 million. These payments represent amounts the United States is willing to accept due solely to SNAP’s, Raviv’s, and Burton’s respective financial conditions, as shown by sworn financial disclosures. SNAP and Raviv also entered into a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services, requiring SNAP to, among other things, retain an independent review organization to perform annual reviews of claims and submit reports to the OIG-HHS.
The settlement was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; Cynthia A. Bruce, Special Agent-in-Charge of the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Southeast Field Office; Gregory Billingsley, Special Agent-in-Charge of the U.S. Department of Veterans Affairs Office of Inspector General’s Central Field Office; Mario Pinto, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of the Inspector General; Martin J. Dickman, Inspector General of the U.S. Railroad Retirement Board Office of the Inspector General in Chicago; and Amy K. Parker, Special Agent-in-Charge of the U.S. Office of Personnel Management Office of the Inspector General. The government was represented by Senior Litigation Counsel Sarah J. North and Assistant U.S. Attorney Kate Flannery.
“When health care providers violate their obligation to properly bill for federally funded treatment, government programs and American taxpayers pay the price,” said U.S. Attorney Lausch. “Our office remains committed to protecting taxpayers and preserving the integrity of our federal health care system.”
“American taxpayers should never foot the bill for private companies seeking to profit by defrauding government programs,” said FBI Special Agent-in-Charge Buie. “The FBI will continue working with law enforcement and prosecutorial partners to fight illegal kickback schemes and ensure that justice is done within the federal medical system.”
“We aggressively investigate cases of fraud, which take money from VA programs meant to benefit our nation’s veterans and their families,” said VA OIG Special Agent-in-Charge Billingsley. “The VA OIG thanks the U.S. Attorney’s Office and our law enforcement partners for their efforts in this joint investigation. We encourage anyone who becomes aware of fraud against the VA to contact the VA OIG Hotline.”
“We are proud to be part of this collaborative effort and would like to thank our law enforcement partners and the U.S. Attorney’s Office for their dedication and excellent work in this case,” said RRB-OIG Inspector General Dickman. “Medicare fraud remains a top federal law enforcement priority and providers who exploit our healthcare system will not be tolerated.”
“The OPM OIG is committed to holding accountable those who seek to enrich themselves by inflating costs and overbilling the Federal Employees Health Benefits Program for medically unnecessary tests,” said OPM OIG Special Agent-in-Charge Parker. “We applaud our investigative staff and law enforcement partners on today’s settlement, which is a direct result of their hard work investigating these types of health care fraud schemes.”
“Individuals involved in this scheme defrauded TRICARE and I am pleased that the U.S. Attorney’s Office is requiring justice,” said DCIS Special Agent-in-Charge Bruce. “DCIS agents will continue to pursue individuals who improperly profit from our military health care system and all taxpayers.”
The settlement resolves two civil lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act. The Act permits private citizens to bring lawsuits on behalf of the United States for false claims, and to share in any recovery. The United States intervened in the two lawsuits and filed a complaint in intervention prior to the settlement. The settlement agreement is neither an admission of liability by SNAP, Raviv, or Burton, nor a concession by the United States that its claims are not well founded.