California Bay Sleep Clinic Technician Gets $545K Whistleblower Award In $2.6M FCA Settlement

Whistleblower Elma F. Dresser will receive a $545,000 whistleblower award for aiding the United States in reaching a $2.6 million settlement with northern California’s Bay Sleep Clinic, affiliates Qualium Corporation and Amerimed Corporation, and owners and operators, Anooshiravan Mostowfipour and Tara Nader, the Department of Justice announced Wednesday.

California Bay Sleep Clinic Technician Gets $545K Whistleblower Award In $2.6M FCA Settlement

The $2.6 million settlement resolves allegations that Bay Sleep Clinic and other defendants violated the False Claims Act by submitting false claims to the Medicare program for diagnostics and medical devices.

Whistleblower Dresser Alleges Non-Licensed Sleep Clinic Staff, Non-Approved Testing Locations, Illegal Kickbacks

Former eight-year Bay Sleep Clinic marketer and sleep technician, Elma F. Dresser, filed the initial whistleblower lawsuit in April 2012, after obtaining inside information of the defendants’ improper Medicare billings.

Elma Dresser’s initial “qui tam” complaint alleged that California’s Bay Sleep Clinic, Qualium Corporation, Amerimed Corporation, Anooshiravan Mostowfipour and Tara Nader defrauded Medicare by; hiring non-qualified, non-credentialed staff to oversee sleep studies, offering sleep-disorder products and sleep testing at non-approved locations, engaging in self-dealing, allowing non-licensed staff to prescribe medical devices and paying kickbacks for referrals.

Furthermore, whistleblower Dresser alleged that Access Medical Consultants, the defendants’ Medicare billing agent, was aware of the alleged violations and assisted in submitting false claims to Medicare.

The United States intervened in the action in May 2015, filing its initial complaint in September 2015. According to an amended complaint filed on August 8, 2016, Mostowfipour and Nader, owners of Amerimed Sleep Diagnostics and Qualium Corporation, allegedly falsified documents to show that the defendants performed sleep tests at their two Medicare-approved locations when tests had actually been conducted unapproved facilities.

In addition, the providers of the diagnostic sleep tests allegedly supplied medical devices, shared sleep laboratory locations with durable medical equipment providers and paid doctors for referrals.

Fraudulent Medicare Billings Endanger Patients, Violate Federal False Claims Act

To ensure safe, quality medical care, Medicare rules and regulations require that sleep technicians obtain proper licenses and certifications to perform sleep tests. Additionally, the Medicare program prohibits providers of diagnostic sleep tests from supplying medical devices and from sharing sleep laboratory locations with durable medical equipment providers.

This prevents providers from making faulty patient care decisions around profits and arrangements, much in the same way that the Anti-Kickback Statute prevents physicians making patient care decisions around physician profit rather than what is in the best interest of the patient.

When a medical provider bills Medicare for products or services in violation of Medicare rules and regulations or the Anti-Kickback Statute, they generate a false claim. The federal False Claims Act provides for treble damages and penalties of $5,500 to $11,000 for each false claim presented to Medicare for payment. 

“Medicare patients expect to be treated by properly credentialed health care professionals in approved locations,” said U.S. Attorney Brian J. Stretch.  “When companies treating Medicare beneficiaries violate the rules, they will be held accountable.” 

In order to protect Medicare beneficiaries and ensure adequate, safe care and treatment, federal and state False Claims Acts allow private individuals with knowledge of Medicare fraud to bring whistleblower, “qui-tam” actions on behalf of the government. For their efforts in helping to uncover the fraud, the government awards whistleblowers between 15% and 30% of any government recovery resulting from their report.

Dresser Awarded $545K - Bay Sleep Clinic Pays $2.6M, Enters 3-Year Exclusion Agreement

Defendants Bay Sleep Clinic, Qualium Corporation, Amerimed Corporation, Anooshiravan Mostowfipour and Tara Nader have agreed to pay $2.6 million to settle the allegations in this case. In addition to the settlement amount, the defendants agreed to terminate their Medicare enrollments and agreed not to re-enroll as Medicare providers or suppliers for a period of three years.

The government awarded whistleblower Elma F. Dresser approximately $545,000, nearly 21% of the settlement amount, for her efforts in putting a stop to the fraud.

According to the Department of Justice, the claims resolved by this settlement are allegations only and there has been no determination of liability.

“Medicare beneficiaries need full confidence their medical professionals are properly licensed and services are provided in fully approved facilities,” said U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven Ryan.  “Patients and taxpayers deserve no less.”

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