Healthcare Providers Settle False Claims Case for $764,000 Over Improper Billing and PPP Loans

Troy Sleep Center PLC, Care One Medical Equipment and Supplies, Inc., and their owners have agreed to pay approximately $764,000 to settle allegations they improperly billed federal healthcare programs and misused Paycheck Protection Program funds, according to an announcement from the United States Attorney’s Office for the Eastern District of Michigan.

The settlement resolves claims brought forward by a whistleblower under the qui tam provisions of the False Claims Act. Brown, LLC, a whistleblower law firm, represented the individual who exposed the alleged misconduct.

“Healthcare fraud schemes often come to light because someone inside the organization is willing to speak up,” said Jason T. Brown, Chair of Brown, LLC. “Whistleblowers play a critical role in protecting taxpayer-funded programs and ensuring that providers who misuse federal healthcare and pandemic relief funds are held accountable.”

The case targeted two Michigan-based healthcare businesses operating in the sleep disorder treatment sector. Troy Sleep Center provides diagnostic services for sleep disorders, while Care One Medical Equipment and Supplies furnishes equipment used to treat sleep-related conditions.

According to government allegations, Troy Sleep Center submitted Medicare and Medicaid claims for sleep studies conducted without properly trained and certified sleep technicians, violating federal regulations that establish minimum standards for reimbursable services. This requirement ensures patient safety and diagnostic accuracy in sleep medicine.

The settlement also addresses allegations that the defendants inappropriately obtained approximately $480,000 in Paycheck Protection Program loans while engaged in non-compliant healthcare billing practices. The PPP was established during the COVID-19 pandemic to help businesses maintain their workforce, but applicants were required to certify compliance with applicable laws and regulations.

Additionally, Care One Medical Equipment and Supplies allegedly billed Medicaid separately for accessories related to positive airway pressure (PAP) machines, contrary to Medicaid reimbursement rules. PAP devices are commonly prescribed for sleep apnea, a condition characterized by interrupted breathing during sleep.

Federal authorities emphasize that the claims resolved by the settlement are allegations only, with no determination of liability having been made by a court.

The whistleblower complaint was filed under seal in the United States District Court for the Eastern District of Michigan (Case No. 24-cv-11073-SKD). Multiple agencies collaborated in the investigation, including the United States Attorney’s Office for the Eastern District of Michigan, the Michigan Attorney General’s Health Care Fraud Division, and the U.S. Department of Health and Human Services Office of Inspector General.

This case highlights the ongoing efforts by federal and state authorities to combat healthcare fraud, which costs taxpayers billions of dollars annually. The False Claims Act remains one of the government’s most effective tools in these efforts, allowing private citizens to file suits on behalf of the government and share in any financial recovery.

Healthcare fraud enforcement has intensified in recent years, with particular scrutiny on providers who simultaneously participated in pandemic relief programs. The intersection of healthcare compliance and COVID-19 relief funds has created a new frontier for whistleblower claims and government investigations.

Brown, LLC has established itself as a significant player in whistleblower litigation. Led by former FBI Special Agent Jason T. Brown, the firm reports having helped return over a billion dollars to taxpayers through cases involving Medicare fraud, Medicaid fraud, pharmaceutical fraud, and other forms of government program fraud.

The qui tam provisions of the False Claims Act entitle whistleblowers, also known as relators, to receive between 15% and 30% of the government’s recovery, creating a powerful incentive for individuals with knowledge of fraud to come forward.