Great Customer Support

North Carolina DME Company to Pay More than $20M in Fines and Restitution for Role in Medicaid Fraud

A durable medical equipment provider in North Carolina received a probation sentence of five years for healthcare fraud it committed.

In addition to the probation period, the company, A Perfect Fit For You, Inc., also must pay a fine of $2 million and more than $10 million in restitution to the North Carolina Medicaid Program.

As part of the settlement agreement, the owner and the company will pay millions of dollars to the state of North Carolina as well as the federal government to resolve civil claims that were filed under the state and federal False Claims Acts. One of the company’s employees also had a judgment in the multiple millions of dollars levied against them by the same governments.

Court documents released the company was owned by Margaret A. Gibson. It provided DME including diabetic shoes, orthotic braces, powered wheelchairs, osteogenesis stimulators, pneumatic compressors and powered air flotation beds.

Between 2015 and 2016, at least one employee at the company fraudulently submitting billing claims to the Medicaid program, claiming they provided DME to recipients of Medicaid.

The claims themselves included personally identifiable information about the patients who either never received DME or never even ordered it from the company. Some of the patients who were billed for the equipment had been deceased for years before the company submitted the fraudulent claims. As a result of the scheme, Medicaid was estimated to have lost more than $10 million.

The company eventually appointed a receiver, who eventually self-reported the activity to the investigations division of North Carolina Medicaid. At that point, the company fully cooperated with the investigation.

A joint civil complaint was filed on December 13, 2017, as a result of the investigation by North Carolina and the federal government. The complaint, done under the state and federal False Claims Act, named the company, the company’s owner Gibson, as well as Shelley P. Bandy, an employee of the company.

The two False Claims Acts require that the money recovered by triple the value that was obtained falsely, plus civil penalties for each individual false claim. As part of resolving that claim, the company agreed to pay a total of more than $20 million, with Gibson agreeing to pay $4 million.

North Carolina and the U.S. government obtained a nearly $35 million default judgment against Bandy for her role in the scheme.

On December 29 of 2020, Bandy pled guilty to making false statements relating to health-care matters. She admitted to submitting these false claims to the Medicaid program on behalf of A Perfect Fit For You, Inc. She will be sentenced for her crime sometime in 2021.