Since CMS implemented a six-month nationwide moratorium on new Medicare enrollment for certain durable medical equipment suppliers, the Justice Department has announced at least four settlements and sentences tied to DME fraud schemes.
CMS said it stopped more than $1.5 billion in suspected fraudulent durable medical equipment, prosthetics and orthotics suppliers billing last year. According to a CMS action notice, the moratorium applies to seven supplier specialty categories: medical supply companies; medical supply companies with orthotics personnel; with pedorthic personnel; with prosthetic personnel; with prosthetic and orthotic personnel; with a registered pharmacist; and with a respiratory therapist. During the moratorium, no new suppliers in those categories may enroll in Medicare, and new practice locations are barred when they qualify as initial enrollments.
CMS cited data from 2023 to 2025 showing that medical supply company specialties had a 17% revocation rate, nearly triple that of other DMEPOS supplier types, and ranked among the highest for payment suspensions, law enforcement referrals and fraud complaints.
1. On March 9, a chiropractor in Powder Springs, Ga., was sentenced to 43 months in prison for her role in a $14.9 million healthcare fraud scheme involving claims for medically unnecessary DME. Prosecutors said Teflyon Cameron and her co-conspirators owned, operated or held financial interests in DME companies that obtained physicians’ orders for medically unnecessary orthotic braces.
2. Also on March 9, a man in Fulshear, Texas, was sentenced to 90 months in prison for his role in a $59.9 million scheme involving medically unnecessary DME billed to Medicare. Patrick Cassells owned and operated three DME companies and concealed his role in one of them by listing another person as the sole owner and manager on a Medicare enrollment application. Prosecutors said he paid illegal kickbacks to co-conspirators who provided signed physicians’ orders and other paperwork used to bill Medicare for orthotic braces, including knee, back, shoulder and wrist braces. The kickbacks were allegedly disguised as payments for “leads” and “marketing.”
3. On March 6, Waukesha, Wis.-based Kinex Medical Co. agreed to pay $6.9 million to resolve allegations that it submitted false claims to Medicare, Tricare and other federal healthcare programs. Between 2019 and 2024, Kinex allegedly provided patients with braces they did not need and billed federal programs as though the equipment was medically necessary. The allegations involved knee, shoulder and hip braces.
4. Also on March 6, Kartik Bhatia of Geneva, Ill., was sentenced to two years in prison for a scheme that defrauded Medicare of more than $2 million through claims for medically unnecessary DME. Prosecutors said Mr. Bhatia conspired with Raju Sharma and others to own and operate a DME company that paid telemarketing companies for orthotic brace orders, including ankle, wrist, knee and back braces. In many cases, Medicare beneficiaries did not need or request the braces, and the physicians whose signatures appeared on the orders often did not treat the beneficiaries or prescribe the equipment.
