Sleep clinic agrees to pay $2.6M for dual role

SAN JOSE, Calif. - Bay Sleep Clinic and its related businesses have agreed to pay $2.6 million to settle allegations that they were involved in both the diagnosis and treatment of sleep patients, a violation of Medicare rules and regulations.

The government charged Bay Sleep Clinic and its related businesses—Qualium Corp., which operates 20 sleep clinics, and Amerimed Corp., which does business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialist—with fraudulently billing Medicare for medical devices in violation of rules and regulations that prohibit providers of sleep tests from supplying medical devices and from sharing a sleep lab location with a DME supplier.

The government also charged the companies with fraudulently billing Medicare for sleep tests allegedly performed by technicians lacking the required licenses or certifications, and with fraudulently billing Medicare for sleep tests that were allegedly conducted at un-enrolled and unapproved locations.

The allegations against Bay Sleep Clinic were set out in an amended False Claims Act complaint filed by the government on Aug. 8, 2016.

The government intervened in a whistleblower action filed under the qui tam provisions of the False Claims Act. The act allows for private persons, such as Elma Dresser in this case, to file actions to provide the government with information about wrongdoing and then obtain a portion of the government's recover. Dresser will receive about $545,000.

As part of the agreement, Bay Sleep Clinic has voluntarily terminated its two existing Medicare enrollments and agreed not to re-enroll as providers in the Medicare program for a period of three years.

The claims resolved by the settlement are allegations only and there has been no determination of liability.