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Sunday, April 15, 2012

Diabetic Supply Company Penalized

The firm AmMed Direct has to pay $18 million for wrongly billing Medicare for diabetes supplies as well as other products. The US government will get $17.6 million while Tennessee will get $439,003 as part of the civil settlement. The U. S. Attorney’s Office revealed this last Friday. The whistle blower will get $2.8 million payment.

AmMed Direct, based in Nashville, apparently ran a marketing scheme from 2008 to early 2010. It advertised free cookbooks with no mention of diabetic supplies. This made Medicare customers call the company. Once AmMed found out that the caller for the free cookbook is covered by Medicare, they tried to sell the caller supplies. To make it worse, Medicare was improperly billed for the supplies.

Money from the returned diabetic supplies was not refunded to Medicare although just before it learned of the federal and state inquiry, AmMed informed Medicare that it failed to refund the funds for returned merchandise. It then started to pay refunds to Medicare and TennCare.

Bryan McNeese, the whistle-blower, will get $2.8 million under provisions of the federal False Claims Act. Offering free cookbooks when they were really selling diabetic supplies is a marketing ploy that will not be tolerated. Not only are they targeting the vulnerable but also I hate it when some play around with the health care system.

No wonder some cannot be covered by Medicare when the money that should go to the rightful people who need and deserve it are spent for fraudulent purposes. I hope many more will be found out as I heard that for every one closed by the government, another one takes it place and opens for business.

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