Diabetes medical equipment companies to pay more than $12 million to resolve criminal allegations

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Two companies and two executives at those firms agreed to pay more than $12.2 million to resolve allegations that they made illegal, unsolicited telephone calls trying to sell diabetes-related medical equipment to Medicare beneficiaries.

U.S. Healthcare Supply agreed to pay more than $5 million, while company owner Jon P. Leftko agreed to pay more than $1 million. Edward J. Letko, Jon’s brother and owner of Oxford Diabetic Supply, agreed to pay $6 million plus interest.

The U.S. Department of Justice (DOJ) announced the settlements on Sept. 7 but mentioned that the claims were only allegations and did not indicate the parties were liable for the alleged crimes.

The DOJ said that U.S. Healthcare Supply and Oxford Diabetic Supply set up and controlled Diabetic Experts. Through Diabetic Experts, the companies allegedly made unsolicited calls to the Medicare beneficiaries and submitted claims to the Centers for Medicare & Medicaid Services based on the equipment they sold via the calls, which violated the Medicare Anti-Solicitation Statute.

“Cold-calling people to sell them expensive medical equipment is prohibited for a reason: unsuspecting patients shouldn’t be coerced into making medical decisions about devices and equipment which they may not even need on the basis of a sales pitch,” U.S. Attorney Paul J. Fishman for the District of New Jersey said in a news release.