National durable medical equipment manufacturer Joint Active Systems, Inc. (JAS) has agreed to pay $1.5 million, and orthotics and prosthetics clinic chain New England Orthotics & Prosthetics, LLP (NEOPS) has agreed to pay $90,000, to resolve allegations that they violated the False Claims Act by improperly charging the government for custom fabricated orthotics. NEOPS, which has locations throughout New England and New York, filed for bankruptcy in 2017, and is now under new ownership. The government contends that JAS recruited NEOPS to improperly bill state Medicaid programs in Connecticut, Massachusetts and Rhode Island for JAS devices when JAS did not have participation agreements with those programs. The federal government jointly finances those Medicaid programs. Under the arrangement, NEOPS billed those programs for JAS devices as custom-fabricated orthotics when the devices were neither orthotics nor custom-fabricated, and when custom-fabricated devices were not medically necessary. As part of the arrangement, NEOPS claimed to the Medicaid programs that it treated the patients receiving the JAS devices when, in fact, JAS-affiliated sales representatives measured, fitted and delivered the devices to the patients. The JAS-affiliated sales representatives lacked the training and certifications necessary to provide custom-fabricated orthotics under certain state regulations. After submitting false claims for the devices, NEOPS received reimbursement from the Massachusetts, Connecticut and Rhode Island Medicaid programs, and remitted a portion of that reimbursement back to JAS.
