Medical Company Owner, Wife to Pay $600K in FCA Case

The owner of a Central Florida medical supply company and his wife recently agreed to pay $600,000 to resolve allegations that they participated in a scheme to defraud Medicare in violation of the False Claims Act.

The case grew out of a whistleblower lawsuit initially filed in March 2014 by Jael Cancel, an employee of the company Central Medical Systems, LLC against the company and Alan T. Harley, president and owner of the company.

Cancel alleged that Harley routinely upcoded ordered items to a larger size or more expensive product than was shipped to patients in order to receiver higher reimbursement from Medicare. From at least 2011 through 2015, Harley knowingly defrauded the government of more than $870,000 by submitting fraudulent claims to Medicare, according to the lawsuit.

It’s alleged that Harley kept two sets of records, one with the actual items he claimed were sent, and which used specific alphanumeric codes, and one using more vague terms that patients were asked to sign for. It was alleged that Harley would routinely manipulate those records, resulting in higher reimbursement from Medicare.

Four years after the original whistleblower lawsuit was filed, the government intervened and added Joan Harley, Arthur Wright and Meddex Solutions as defendants. The government alleged that Alan Harley conspired with his wife Joan Harley, along with Wright and Meddex Solutions.

Harley and his wife previously owned Meddex but sold it to Wright in an effort to “Illegally subvert†an administrative payment suspension that had been imposed on Central Medical Systems by the Centers for Medicare & Medicaid Services (CMS) while it was monitoring payment claims based on the fraudulent billing allegations made in the lawsuit.

The government alleged that between Feb. 6, 2018 and May 2018 alone more than $480,000 in payments were made to Meddex. In June 2018, CMS imposed a payment suspension on Meddex.

Prior to the settlement, Alan Harley pleaded guilty to one count of wire fraud and was sentenced to 15 months in prison. He also was ordered to forfeit more than $870,000 in proceeds he received from the fraud.

In addition, the government entered into a settlement agreement with Arthur Wright and Meddex under which they agreed to pay $77,742 to resolve the False Claims allegations against them.

Because this is a whistleblower case, Cancel will receive a portion of the recovered monies.

The Health Law Offices of Anthony C. Vitale is known for its representation of whistleblowers, as well as our ability to defend those who are the target of a whistleblower action. Contact us for additional information at 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.