Investigations Newsletter: Medical Supply Exec Agrees to Pay $20.3 Million to Settle FCA Claims

Arent Fox

Headlines that Matter for Companies and Executives in Regulated Industries

Medical Supply Exec Agrees to Pay $20.3 Million to Settle FCA Claims

Kelly Wolfe of Indian Rocks Beach, Florida, has agreed to a $20.3 million settlement to resolve civil False Claims Act (FCA) claims. According to court filings, Wolfe and her alleged conspirators used Wolfe’s company, Regency Inc., to establish several durable medical equipment (DME) supply companies as fronts, using the names of straw owners. Wolfe’s conspirators then allegedly gained control of the DME fronts and collectively submitted more than $400 million in false claims to Medicare and the Civilian Health and Medical Program of the VA. The alleged claims falsely reported the use of telemedicine procedures, when in actuality, no telehealth interactions took place with the beneficiaries, and the conspirators had instead bribed doctors to approve the claims. Wolfe also pleaded guilty to criminal health care and tax fraud charges.

The DOJ press release is here.

Physical Therapy Practice and Owner to Pay $152,000 to Resolve FCA Claims

Southeastern Physical Therapy (SEPT) and its owner, Darren Cady, settled FCA claims arising out of the alleged submission of claims for medically unnecessary durable medical equipment (DME) to the VA. According to the government, SEPT and Cady made false statements and material omissions regarding the medical necessity of DME. The government also alleges that SEPT and Cady were paid illegal kickbacks from the manufacturer of DME for prescribing the equipment to VA patients. “Prescribing devices to VA patients that are not medically necessary is dangerous and wastes important resources intended to help our nation’s veterans,” said Andrew Murray, U.S. Attorney for the Western District of North Carolina. “My office will vigorously pursue providers and other actors that seek to take advantage of VA benefits through the submission of false claims that promote fraud and abuse in these critical government programs.”

The USAO press release is here.

Former Trump Administration Health Care Attorney Discusses FCA Trends

Brenna Jenny, who held top posts in the Trump administration at the Department of Justice and Department of Health and Human Services, recently discussed trends in False Claims Act enforcement with Law360. Starting in 2018, Jenny served as counsel to the assistant attorney general in DOJ’s Civil Division. In September 2018, Jenny became deputy general counsel at HHS and later served as principal deputy general counsel, as well as the chief legal officer of the Centers for Medicare & Medicaid Services. While at HHS, Jenny co-founded an FCA working group.

In the interview, Jenny discusses enforcement priorities under the Biden administration, including that COVID-related issues such as blanket CMS waivers, nursing homes, and telehealth are likely to be a primary focus. Jenny also discusses HHS’s and DOJ’s more limited use of guidance documents as another key enforcement priority. Read the full interview with Law360 here.

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Arent Fox

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