Sleep Clinic Owners to Settle Fraud Allegations

SARATOGA, CA -- The owners of a chain of Bay Area sleep clinics and their companies have agreed to pay $2.6 million to settle allegations of Medicare fraud, the U.S. Justice Department has announced.

The Dec. 28 settlement resolves a U.S. False Claims Act lawsuit filed in federal court in San Jose against Saratoga residents Anooshiravan Mostowfipour and Tara Nader, both 58, and their two companies.

The companies were Qualium Corp., which operated 20 sleep clinics known as Bay Sleep Clinic, and Amerimed Corp., which did business as Amerimed Sleep Diagnostics, a supplier of medical equipment.

The lawsuit was originally filed under seal in 2012 as a so-called "whistleblower" lawsuit by a sleep technician, Elma Dresser, who alleged the companies engaged in fraudulent Medicare billing.

In 2015, the Justice Department decided to join the lawsuit.

The suit alleged the companies billed for sleep tests conducted at unapproved locations and falsified documents to indicate the tests took place at approved facilities. It also alleged the companies billed for services by sleep technicians who lacked the licenses and certifications required by Medicare payment rules.

The suit additionally contended the defendants violated a Medicare rule that prohibits sleep test providers from selling medical devices.

The defendants do not admit any liability in the settlement.

As part of the pact, the companies and owners also agreed to terminate their enrollment in the Medicare program for three years.

Under the False Claims Act, Dresser, as the original whistleblower, will receive $545,000 of the settlement.

Bay City News contributed to this report/Image via Shutterstock