Is My DME Business Safe? - Healthcare Fraud Defense Firm
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Is My DME Business Safe?

From intentional and unintentional coding errors to unlawful order fulfillment in telemedicine, durable medical equipment (DME) companies can face a broad range of allegations in federal healthcare fraud allegations. If your DME business bills Medicare, Medicaid, Tricare, or the Department of Labor (DOL), having a comprehensive compliance program and taking defensive action at the first sign of an investigation are crucial steps for avoiding catastrophic penalties.

Without durable medical equipment (DME), modern medicine would not be the same. From blood sugar monitors to walkers and wheelchairs, these products are integral to all stages of medical care, from a patient’s preliminary diagnosis to his or her long-term health and mobility.

Due to the enormous need for DME, the federal government’s healthcare benefit programs – Medicare, Medicaid, Tricare, and the Department of Labor (DOL) employee benefits plan – all provide coverage for DME. This includes coverage for products such as (but not limited to):

  • Blood sugar monitors
  • Blood sugar test strips
  • Canes
  • Commode chairs
  • Continuous passive motion devices
  • Continuous Positive Airway Pressure (CPAP) devices
  • Crutches
  • Hospital beds
  • Infusion pumps and supplies
  • Lancet devices and lancets
  • Nebulizers and nebulizer medications
  • Oxygen equipment and accessories
  • Patient lifts
  • Pressure-reducing beds, mattresses, and mattress overlays
  • Suction pumps
  • Traction equipment
  • Walkers
  • Wheelchairs and scooters

However, while these products are often necessary, they are not necessary in all cases, and Medicare and the other federal healthcare benefit programs will only pay for DME that qualifies as “medically necessary” under the applicable program guidelines.

For DME businesses, understanding whether a device is medically necessary in the context of a particular patient’s needs can be challenging. Personnel are heavily reliant on doctors’ DME orders, and they have to assume that doctors are issuing orders for DME based upon medically-appropriate consultations and the exercise of sound medical judgment. Is this usually the case? Yes, of course. Is it always the case? Absolutely not.

Questions of medical necessity are just one area where DME companies can run into issues with billing Medicare, Medicaid, Tricare, and the DOL. In today’s world, the Centers for Medicare and Medicaid Services (CMS), Department of Justice (DOJ), the Office of Inspector General (OIG), the Medicare Fraud Strike Force, and various other federal agencies and task forces are aggressively targeting DME businesses (and their owners and executives) in healthcare fraud investigations. Is your DME business safe? Maybe. But, to make sure, you should speak with an experienced federal defense lawyer as soon as possible.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Federal Healthcare Fraud Defense Lawyers Available to Represent DME Companies Nationwide

Oberheiden, P.C. is a federal healthcare fraud defense firm that represents clients nationally in healthcare fraud matters – including compliance, audits, investigations, trials, and appeals. Our lawyers have extensive experience representing DME companies and their owners and executives, and several of our attorneys previously served as healthcare fraud prosecutors with the DOJ. Whether you have concerns about your company’s present compliance efforts; you have been contacted by a MAC, RAC, or ZPIC auditor; or, your business is being targeted in a federal healthcare fraud investigation, we can help you, and we encourage you to call us immediately at 866-824-5165 for a free and confidential consultation.

How To Select a DME Defense Attorney

Common Issues that Can Lead to Trouble for DME Companies

1. Lack of Medical Necessity

As referenced above, lack of medical necessity is among the issues most likely to lead to trouble for DME companies. In the context of a healthcare fraud investigation, medical necessity is determined not by the doctor who orders a piece of durable medical equipment, but instead by the strict language of the applicable program billing guidelines. Not only can these guidelines override doctors’ medical judgment, but they also vary from one program to the next (this is a fact of which many billing administrators – including third-party billing administrators – are unaware). When a high volume of similar orders suggests a lack of medical necessity, DME companies can face scrutiny for not themselves adequately scrutinizing the orders they fulfill.

2. Unlawful Compensation Agreements

Unlawful compensation arrangements are another hot-button issue in federal healthcare fraud, and this is another area where there is a significant amount of confusion and misunderstanding among DME companies. While this can be (and is) an issue under a variety of different circumstances, it tends to be particularly prevalent in telemedicine practices. Under the Anti-Kickback Statute, it is illegal to offer, pay, solicit, or receive any improper payment from program-reimbursed funds, and DME companies will often get into trouble for paying referral fees to physicians and telemedicine companies (which often illegally buy lists of program beneficiaries from shady marketers).

This is true even in cases where a payment is structured as a “consulting” or “medical director” fee. During an investigation, federal agents and prosecutors will look past the terminology the parties have selected and examine the source, destination, and purpose of any payments to determine whether illegal kickbacks or referral fees have been paid.

3. Telemedicine Order Fulfillments

In addition to Anti-Kickback Statute implications, telemedicine order fulfillments will often raise a number of other “red flags” in the eyes of federal agents and prosecutors as well. This is particularly true in cases where physicians routinely issue orders for the same types of durable medical equipment and have an exceptionally high approval rate. Once again, while these are matters that fall outside of DME companies’ direct control, they can nonetheless trigger liability for civil – and potentially criminal – federal statutory violations.

4. Inadequate Documentation

As a result of these and other concerns, for DME businesses that bill Medicare, Medicaid, Tricare, and the DOL, maintaining comprehensive documentation is of critical importance. This applies to physicians’ notes justifying DME order fulfillment; lawful agreements with physicians, telemedicine companies, marketers, billing companies, and other third parties; and, internal compliance processes and procedures. When auditors or federal agents come knocking, having detailed documentation at the ready can often avert invasive and potentially-dangerous inquiries.

5. Billing and Coding Issues

Now, let’s skip ahead in time. You have a compliance program, you have controls in place to ensure that all DME billed to the government is medically necessary, and you are confident that your third-party agreements are lawful. Is your DME business safe now? Maybe, but maybe not. Due to the enormous complexity of the federal healthcare benefit program billing regulations, mistakes are common, and even unintentional errors made by well-meaning billing administrators can trigger liability under the False Claims Act and other federal laws.

6. Reliance on Third Parties

As the owner or officer of a DME company that bills Medicare, Medicaid, Tricare, and/or the DOL, you cannot delegate your compliance obligations. Even if you hire a third-party billing company to handle code entry, if this company makes mistakes, it is still your company that has “falsely and fraudulently” overbilled the federal government. As a result, when entering into agreements with third-party billing administrators and other companies, it is absolutely essential to include adequate protections so that your company has a source of financial recovery if you are held liable for billing violations.

7. Misunderstanding of Federal Requirements

Finally, once again due to the enormous complexity of the legal and regulatory system that governs Medicare, Medicaid, Tricare, and DOL reimbursements, issues often arise simply due to honest misunderstandings of the rules that apply. Maintaining compliance is not easy; and, for most DME companies, avoiding costly mistakes requires the advice and guidance of a team of experienced federal healthcare fraud defense lawyers.

Compliance, Audits, and Investigations: Three Separate Concerns for DME Businesses

With a team of career healthcare fraud defense lawyers and former DOJ prosecutors, our firm is able to offer DME businesses clear, comprehensive, and practical legal advice for all Medicare, Medicaid, Tricare, and DOL-related matters. This includes answering questions such as:

1. How Do You Know if Your Compliance Program is Good Enough?

The importance of an effective compliance program cannot be overstated. With hindsight from more than 2,000 federal healthcare fraud cases, our attorneys can assess your DME company’s existing compliance program and help you adopt any additional measures that may be necessary.

2. Why is Your DME Business Being Audited?

“Fee for service” auditors working with CMS routinely conduct audits of DME businesses. If you have been contacted by a Medicare administrative contractor (MAC), recovery audit contractor (RAC), or zone program integrity contractor (ZPIC), we can help you understand what is at stake and deal with the auditors on your behalf. Learn more.

3. What Should You Do if You Have Received a Target Letter, Subpoena, or Civil Investigative Demand (CID)?

If you have received a target letter, subpoena, or civil investigative demand (CID), this most likely means that federal agents are looking into your company’s program billing history or your relationship with other providers. Our attorneys can promptly intervene in the investigation to determine what is being alleged and what we need to do to defend you. Learn more.

DME Defense Attorney: What to Do

Contact the Federal Healthcare Fraud Defense Lawyers at Oberheiden, P.C.

Are you concerned that your DME business could be at risk in the event of a federal healthcare fraud investigation? Are you already facing questions from auditors or federal authorities? If so, we encourage you to contact us for a free and confidential consultation. Our federal defense lawyers are available 24/7, including nights and weekends, so call 866-824-5165 or tell us what we can do to help online now.

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