A company whose products did not meet state Medicaid requirements is alleged to have directed O&P providers to improperly submit claims under orthotics L-Codes. Joint Active Systems (JAS), a manufacturer of range-of-motion devices, had received coding verification from the Centers for Medicare & Medicaid Services (CMS) that designated its devices under a durable medical equipment (DME) E-Code.
JAS agreed to pay $500,000 to settle civil claims under the federal and North Carolina False Claims Acts concerning the allegations that the company caused submission of false claims to the North Carolina Medicaid program. Specifically, the United States and the state of North Carolina alleged that from January 2012 through January 2021 JAS was unable to directly bill North Carolina Medicaid for its devices because the company did not meet North Carolina Medicaid requirements and/or lacked the necessary credentials. The company allegedly bypassed those requirements by entering into arrangements with O&P providers in North Carolina to bill the devices on its behalf.
JAS purportedly directed the local providers to improperly submit claims for its devices as orthotics using L-codes, thereby bypassing the medical necessity reviews and/or authorization processes that may have otherwise taken place. The governments alleged that the devices did not qualify for reimbursement as L-Code orthotics under North Carolina Medicaid, and that they were not listed as reimbursable devices on the North Carolina Medicaid fee schedule.
The government noted that the civil claims resolved by the settlement are allegations only and that there has been no judicial determination or admission of liability, and that JAS denies the allegations.
