U.S. Attorney: Wheeling company made millions from Medicare fraud
Federal authorities filed suit Tuesday against Wheeling-based SNAP Diagnostics LLC, alleging the health care company fraudulently billed Medicare for millions of dollars in medically unnecessary services and for services that involved kickbacks.
The suit, filed in U.S. District Court in Chicago, also names SNAP founder Gil Raviv and marketing vice president Stephen Burton as defendants. SNAP is a nationwide provider of home sleep testing services that can diagnose obstructive sleep apnea, a common disorder in which airflow is obstructed during sleep, according to the U.S. attorney's office.
The suit alleges Raviv directed SNAP to submit claims for Medicare recipients' second and third nights of home sleep testing when the company knew only one night of testing was needed. Non-Medicare beneficiaries typically received only one night of testing, authorities said.
"SNAP's business model also relied on several unlawful kickback schemes, which incentivized physicians and their staffs to refer all of their home sleep testing services to SNAP," federal authorities said in an announcement of the lawsuit Tuesday.
Since Medicare began covering home sleep testing in 2009, SNAP has received nearly $9 million from the federal program, almost all of it the result of fraud and kickbacks, according to the suit.
Raviv denied the government's claims in a written statement Tuesday.
"Contrary to the government's claims, SNAP has always complied with the law, provided a good product and a good service, and has never acted falsely in its dealings with the government," he wrote.
Home sleep testing uses a portable monitor to collect information about breathing and oxygen levels while the patient sleeps at home. The testing helps doctors diagnose apnea and establish a treatment plan, authorities said.
The lawsuit claims SNAP paid commissions and bonuses to its sales force for selling the multi-night testing to providers, and it gave free home sleep tests to physicians and their families to induce referrals.
After the testing was performed, SNAP personnel interpreted the results and gave unsigned reports to referring physicians, who in turn would bill as if they had performed the services, the suit states. The suit contends SNAP intentionally allowed physicians to fraudulently bill for this service to improve the company's business and receive more referrals.
Under the federal False Claims Act, the government can recover three times its damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted by the defendants, authorities said.