$3.5M Lawsuit: Wheeling Company Accused Of Defrauding Medicare, Others

CHICAGO — A Wheeling diagnostics company that provides home sleep testing will pay $3.5 million to the United States to settle a civil lawsuit accusing the company of defrauding Medicare and four other federal health care programs through kickbacks and unnecessary home sleep testing.

The suit, filed in U.S. District Court in Chicago, alleges that Snap Diagnostics LLC, a nationwide provider of home sleep testing diagnostic services; its founder, Gil Raviv, of Northbrook; and its vice president, Stephen Burton; violated the False Claims Act and the Anti-Kickback Statute by fraudulently billing Medicare and four other federal health care programs for medically unnecessary services and for services that were occasioned by kickbacks.

The suit alleges that Raviv directed Snap to submit claims for patients’ second and third nights of home sleep testing. The company knew that only a single night of testing was needed to effectively diagnose obstructive sleep apnea and that it routinely tested and claimed only one night for patients with private health insurance, according to court documents. As a result, the suit alleged that, in addition to defrauding five federal agencies, Snap unlawfully multiplied the copays it received from senior citizens who were Medicare beneficiaries.

The suit also alleges that Snap's business model relied on several unlawful kickback schemes, which incentivized physicians and their staffs to refer all of their home sleep testing services to Snap.

RELATED: Sleep Apnea Testing Company Bilked Medicare For Millions

As part of a settlement agreement approved Friday, Snap has agreed to pay the United States $3.5 million, while Raviv will pay $300,000, and Burton $125,000, for a total settlement amount of $3.925 million. These payments represent amounts the United States is willing to accept due solely to Snap’s, Raviv’s, and Burton’s respective financial conditions, as shown by sworn financial disclosures. Snap and Raviv also entered into a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services, requiring Snap to, among other things, retain an independent review organization to perform annual reviews of claims and submit reports to the OIG-HHS.

“When health care providers violate their obligation to properly bill for federally funded treatment, government programs and American taxpayers pay the price,” U.S. Attorney John Lausch said in a news release. “Our office remains committed to protecting taxpayers and preserving the integrity of our federal health care system.”

The settlement resolves two civil lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, according to the news release. The Act permits private citizens to bring lawsuits on behalf of the United States for false claims, and to share in any recovery. The United States intervened in the two lawsuits and filed a complaint in intervention prior to the settlement. The settlement agreement is neither an admission of liability by Snap, Raviv, or Burton, nor a concession by the United States that its claims are not well-founded.