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Sleep Lab and its Owner Settle Allegations of Medicare Violations

by | Jan 13, 2011 | Firm News


(HOUSTON) – HMS Diagnostics Inc. (HMSD Inc.), HMS Diagnostics LLC, (HMSD LLC), Health Management Services Inc. (HMS Inc.) and John Carl Goodman have paid more than $550,0000 in damages to settle alleged violations of the federal False Claims Act, acting United States Attorney Tim Johnson announced today.

While not admitting liability, HMSD Inc., HMSD LLC, HMS Inc. and Goodman agreed to pay $564,532 to settle allegations for alleged Medicare violations. The amount represents two times the alleged single damages to the federally funded program. The full amount of the settlement was paid on Nov. 4, 2008, and the agreement fully executed on Dec. 16, 2008.

HMSD Inc., owned and operated by Goodman, is an Independent Diagnostic Testing Facility (IDTF) specializing in the treatment of sleep disorders. It provides sleep diagnostic testing and is an accredited sleep center. The tests involved in the investigation were polysomnograph sleep tests which require administration by licensed technicians. As an IDTF, HMSD Inc. is required by the Medicare rules and regulations to have administering technicians hold one of six certifications. These administering technicians from HMSD Inc. did not hold such certification, although HMSD Inc. certified it had licensed technologists performing the tests. HMSD Inc. and Goodman should not have billed the tests to Medicare nor should they have received Medicare reimbursement for the tests. The requisite regulation has been in effect since March 15, 1999, well before HMSD Inc. became a Medicare provider. In addition, IDTFs are required to submit the names of their licensed and certified staff members when they submit their Medicare/Medicaid application and are required to amend the application if the licensed or certified personnel change. HMSD Inc. did not adhere to this regulation either, in place from the time IDTFs were implemented. An investigation initiated in late 2006 by the United States Attorney’s Office, the Department of Health and Human Services – Office of Inspector General (DHHS-OIG) and the FBI led to the allegations that from Jan. 1, 2002, through Aug. 30, 2007, HMSD Inc. had been billing Medicare for sleep studies not administered by certified or licensed technicians in violation of Medicare rules and regulations.

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