June 10, 2025 • 43 mins
Operation Brace Yourself, a massive 2019 Department of Justice operation involving the durable medical equipment (DME) industry, was one of the largest health fraud enforcement actions in history and had major legal and compliance repercussions for DME companies. In this two-part series, Stephen Lee, Solo Practitioner, Law Office of Stephen Chahn Lee, recounts the true story of two DME owners who unwittingly found themselves in the crosshairs of this massive government enforcement action.
In part one, Stephen speaks with Michael Silverman, Lawyer, Silverman Bain LLP, and Noel Neil, Chief Compliance Officer, ACU-Serve Corp, who both advised the owners and recommended stopping operations. Michael and Noel discuss how they advised the owners amid increased government scrutiny of the DME industry and also provide practical tips and guidance on how to communicate complex legal issues to clients.
Watch this episode: https://www.youtube.com/watch?v=TPgVnbVQhpc
Listen to part two: https://ahlapodcasts.buzzsprout.com/221709/episodes/17308943-operation-brace-yourself-part-two-defending-dme-clients
Watch part two: https://www.youtube.com/watch?v=eEm85ExPXVQ
Essential Legal Updates, Now in Audio
AHLA's popular Health Law Daily email newsletter is now a daily podcast, exclusively for AHLA Premium members. Get all your health law news from the major media outlets on this podcast! To subscribe and add this private podcast feed to your podcast app, go to americanhealthlaw.org/dailypodcast.
Stay At the Forefront of Health Legal Education
Learn more about AHLA and the educational resources available to the health law community at https://www.americanhealthlaw.org/.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
This episode of AHLA's Speaking of Health Law is
brought to you by AHLA membersand donors like you.
For more information, visitAmericanHealthLaw.org.
SPEAKER_02 (00:17):
My name is Stephen Lee, and I'm an attorney in
Chicago who used to be a federalprosecutor and used to be the
senior counsel to the ChicagoU.S.
Attorney's Office's HealthcareFraud Unit.
And I'm happy to be here forpart one of a two-part podcast
talking about Operation BraceYourself and a real-life example
of how lawyers can help theirclients through some very
(00:39):
difficult circumstances.
I have with me today two otherpeople who were involved in this
real-life example, Noelle Nealand Michael Silverman.
Can you two introduceyourselves?
Start with Noel.
SPEAKER_03 (00:51):
Oh, hi.
My name is Noel O'Neill, thechief compliance officer at
AccuServe.
AccuServe is one of the largestDME billing companies in the
country.
So we have a wide cross-sectionof clients doing pretty much
everything that is involved inDME.
So happy to be here, Stephen.
Michael, turn it over to you,sir.
SPEAKER_01 (01:14):
Hey, everybody.
Pleasure to meet you.
Attorney Michael Silverman here.
I am an attorney and foundingpartner with the law firm of
Silverman Bain that is locatedin South Florida, specializing
in representing healthcarebusiness owners and medical
professionals born and raised inthe DME industry myself, which
is what primarily we'll betalking about from an Operation
(01:35):
Brace Yourself perspective.
So for better or for worse, alarge part of my practice is
representing and working withDME providers given that I'm
born and raised in the space andand happy to be here and to
share some very interestinginformation with our folks that
are attending.
SPEAKER_02 (01:52):
All right, great.
So let's go back to OperationBrace Yourself, which was a
Department of Justice operationthat occurred in the spring of
2019 and then involved severalhigh-profile arrests relating to
durable medical equipment,fraud, kickbacks, and the like.
So Most of you probablylistening to this have probably
(02:13):
heard about this, but let's goback and just take a look back
at that.
Michael, can you just summarizeOperation Brace Yourself for our
audience?
SPEAKER_01 (02:21):
Happy to do so.
So Operation Brace Yourself wasone of the largest takedowns in
Department of Justiceenforcement actions, not only in
the durable medical equipmentindustry, but in the history of
the Department of Justice andhealthcare fraud actions.
It was announced on April 9th,2019.
I've got some interesting factsand figures that I don't want to
(02:42):
get wrong here.
On April 9th, 2019, there was 80search warrants executed in 17
federal districts.
There were 24 individualindividuals charged with over
1.2 billion in losses attributedto those individuals.
In addition to the charges thatwere announced and those losses,
actions were taken against 130different BME companies
(03:05):
nationwide who had submitted 1.7billion in claims and had been
paid over$700 million by thefederal government.
And this was a very, veryinteresting takedown in the DME
space, especially from myperspective, somebody who
watched everything begin tobubble and fizzle around it.
This takedown not only involveddurable medical equipment
(03:28):
providers themselves, but alsomarketing companies and health
care professionals that werealso charged.
And this was such a big takedownand enforcement action that over
five years later to this day,we're still dealing with ongoing
indictments and arrests that arestemming out from this massive
operation.
Noel, tell me, tell us a littlebit from your perspective what
(03:49):
you were seeing going on in thebilling space.
SPEAKER_03 (03:52):
Sure, yeah.
I mean, it was a big deal and itjust really blossomed.
I think anyone and everyone whowatched late night TV back then
prior to 2019 would have seenone of those ads on the screen,
right?
Where, do you have back pain?
Call this number.
right um i think we're allplagued with that but really in
(04:12):
summary for for those of us whowell if you've never heard of
operation brace yourself justkind of very high level what it
really is is um marketers wouldhave these ads where people will
pretty much opt in or call in tosay hey i have back pain and
they will speak to someone mayor may not be in the US.
It could be some remote offshorecall center.
(04:35):
They'll ask them some probingquestions.
What's your pain level, etcetera.
And then they will generate thisbeautiful progress note that
sort of mirrors the requirementsfrom the LCD.
And the LCD is the localcoverage determination.
That is the document thatMedicare has established to
determine coverage for thesebraces.
(04:56):
And then the marketer will takethat information, get doctors,
in some cases, would review itand allegedly in some cases the
doctor actually never spoke withthe patient but just took that
progress note and signed off andmarketers will take those
progress notes and then marketthem to DME companies and
they'll say well we'll give youthis sell you these order for a
(05:17):
certain amount and allegedly theDMEs will pay for that furnish
the braces and then they bill itto Medicare.
And I'm sure we'll dissect thatsurgically as we get through
this discussion, but that's justa very high level of the
process.
And obviously some people buildit themselves and others have
(05:38):
reached out to billing companiesto submit the bill on their
behalf.
But we've taken a very hardstance on this because of the
red flags that were involved andwe'll talk about this as we get
into the specifics.
That's a very high level forBrace Yourself.
It seemed like it was reallysimple.
It's a couple of codes that weresubmitted to Medicare, not a lot
(05:59):
of modifiers, at least at first.
So a lot of providers actuallyattempted to build those by
themselves.
And there are some others in theindustry that were a part of
that clique, if you may, whohelped and facilitated that
building.
So back over to you, Stephen.
SPEAKER_02 (06:17):
Yeah, so look, this was a huge operation that had a
lot of ripple effects, and we'regoing to be talking about those
ripple effects and the rest ofpart one and in part two.
But I think basically I want togive a little thought is from my
perspective.
And so I was a federalprosecutor.
I did not work as a federalprosecutor in any of the
Operation Brace Yourself cases.
(06:38):
I have been involved in some ofthe related cases as a defense
lawyer.
But I think what's reallyinteresting about Operation
Bridge itself is I actuallythink that there's some really
missed opportunities here.
And I actually think that thiscase all could have unfolded
very differently if thegovernment had been actually
more on top of things.
(06:58):
They talk about this case as abillion dollar case.
It should not have ever gottento be that big.
There are all these red flags.
And the government saw a lot ofthese red flags at the time.
One of the big things I see whenI look back at the data is that
there was this huge shift in theMedicare billing.
And you can even see this in thepublicly available data.
(07:20):
Five years before, you know,five years earlier, there was
like no one in the country whoordered large amounts of
prosthetics and orthotics thatwere billed to Medicare.
Just no one.
No one was billing large amountsor no doctor was authorizing
large amounts.
And then you started to see thisshift where suddenly, there were
these doctors and medicalprofessionals who were suddenly
(07:42):
ordering large amounts ofprosthetics or orthotics,
including people who didn't evenspecialize in a field that even
made any sense to do that.
I think I saw like one OBGYN atleast.
And so there were these redflags that this was happening
around the country.
And, you know, I really thinkthis is the kind of thing that,
(08:02):
you know, be honest betterregulation could have actually
clamped down on because allthese red flags the government
talks about now they werepresent before doctors ordering
huge amounts doctors who weren'tin the right specialty ordering
large amounts and also doctorsauthorizing things for patients
whom they didn't really havemuch of any contact with so all
these things were there in thedata and i really think this is
(08:24):
something that could have beendealt with um and so And so, but
it is a widespread problem andinvolves improper billing,
there's improper marketing, andclearly like doctors ordering
things that obviously shouldn'thave happened.
But the big question behind allthis is like, how did this come
about and why?
We're not gonna get into allthat here, okay?
(08:45):
Because what we really wannafocus on is the after effects of
operation for yourself.
SPEAKER_03 (08:50):
And Steven, just before you move on, I wanted to
throw this in there too, becausereally just to preface by saying
that a lot of this happenedprior to the public health
emergency when the rules fortelehealth, which was
purportedly the vehicle thatallowed these schemes, strictly
required that patients could notbe evaluated in their home,
(09:12):
right?
Which is where allegedly theseencounters had occurred.
Patients were required to be ateither approved sites other than
home.
So that utilization wheresupposedly the telehealth could
be used as a vehicle tofacilitate these order was just
one of those evident red flags,right, that this was a problem.
(09:36):
But you're right.
I think the data really speaksfor itself.
And the government was morereactive than they could have
been proactive.
As you said, the data show thespike and show the pattern.
So you're spot on with youranalysis.
SPEAKER_02 (09:51):
And you know, one more thing that happened, like
Michael talked about some of theactions the government took.
They also did make a lot ofregulatory changes going
forward.
So now there was, to the extentthere was ambiguity in some of
the regulations before 2019, alot of that is now more clear.
There are things now that cannotbe ordered under certain
circumstances that peoplethought were okay beforehand.
(10:13):
Okay.
Anyway, but the big thing wewant to talk about today is how
companies basically in the wakeof Operation Brace Yourself,
clearly a lot of companies inthe DMV space were trying to
figure out how to navigate this,how to go forward and try to
basically comply with,especially given everything they
learned as a result of all this.
(10:33):
So Noelle, Michael, can you talkabout this a little bit?
What were you seeing in terms ofhow companies were trying to
deal with the aftermath ofOperation Brace Yourself and the
changes they made in order tocomply?
Noelle, why don't you start?
SPEAKER_03 (10:44):
Sure.
Yeah.
So, I mean, I remember clearlythe news alerts and emails and
everybody really becomingfrantic and asking and reaching
out.
And I think really people Becameaware of things that others have
always been saying that waswrong right are people that had
(11:07):
concerns about certain aspect ofit, but it became apparent now
because now the government isinvestigating it right, so we
see providers.
Some.
evidently continue to do whatthey're doing right because some
of them felt that they would notbe caught and and that's why
there's some residual um andi'll also probably say this
(11:29):
though stephen i think they'refolks who got caught up in
operation brace yourself notthat they had any ill intent but
i think it's just that they wereill-advised or that they lack
the education necessary from abilling perspective, right?
So I'm not gonna say thateverybody involved or everybody
that was implicated really trulyhad really ill intent.
(11:52):
And I think that's evident byOnce folks were made aware that
it was wrong, some folks havesought guidance and counsel to
make sure that theirunderstanding of what they were
told previously prior to theindictments and the news release
was accurate.
So we saw a lot of folks thatreached out to us at AccuServe
(12:13):
and asked questions, asked somespecific billing questions.
And we were able to provide somepoignant guidance and based on
the guidance that was availableat the time as to why there were
concerns in certain areas, andfolks have taken on those
guidance.
And I'm sure Michael has seen itfrom a different perspective
from the termination letters andstuff like that.
So, Michael, won't you justspeak about your specific
(12:36):
experience and what you saw?
SPEAKER_01 (12:39):
To understand Operation Brace Yourself, you
really have to take a step backand get an idea of the DME
industry itself.
These are unlicensed workers.
individuals who can becomeowners of these businesses who
don't have to employ or engageany licensed healthcare
professionals and canessentially hit buttons to
electronically bill and submitclaims.
(12:59):
So the ability to bill Medicarefor these type of equipment, the
barrier to entry to begin withis pretty low.
And what has happened over theyears, as with a lot of the
different retail industries,it's become very difficult for a
supplier of orthotics ordiabetic testing supplies in a
retail walk-in setting to makeends meet between the cuts in
(13:22):
reimbursement and the cost ofgoods and the increasing cost of
everything.
So what happened is folks turnedto online lead generation, mail
order supplies, and marketersdid what they did best.
They got interested individualswho wanted to use supplies, but
a pipeline developed where youhad all these folks who wanted
supplies, but they couldn't getprescriptions from the providers
(13:46):
to write orders for thosesupplies to fulfill them.
And so in about 2016, 2017, inmy practice, a lot of different
DME companies started presentingme with prospective marketing
agreements, relationships witheither telehealth, and I say
telehealth in air quotes becausea lot of this is not telehealth.
(14:07):
Telehealth is a good thing inthe wave of now and the future
when done correctly.
This was telefraud.
This was agreements between DMEcompanies and either marketers
or tech platforms or healthcareproviders directly where for
every order that was receivedback in exchange for this
relationship, this platform orprovider or marketing company
(14:31):
was paid X amount hours perorder it was a blatant kickback
situation fraud from myperspective.
This started building up in 17,2018.
The red flags and warning signswere going off everywhere.
And from a data analyticsperspective, the government
could have hopped on this muchsooner and nipped it in the bud
so that so many lives weren'taffected and ruined over, again,
(14:53):
a lot of this is ignorance andnot intent to break the law, but
the law is very clear and that'softentimes what it was.
And so Operation Brace Yourselfoccurred on April 9th, 2019.
You know, anyone who doesn'tlive under a rock, especially in
the industry, had heard of it.
And so what I saw afterOperation Brace Yourself is
folks who weren't completelyscared that knew what they were
(15:16):
doing was wrong.
I saw a lot of lipstick going onthe pig insofar as a lot of
these workers, Agreements keptcoming to my desk wherein it
wasn't X dollars per order thatwas returned to the DMV supplier
or X dollars per order that wassubmitted Requested to be seen
by the telehealth provider.
They were paying what theycalled platform technology fees
(15:39):
where it was X dollars or accessor in tranches depending on the
amount of individuals that wereseen by the telehealth company
or telehealth provider and sothat's what I began to see in
the summer of 2019 and we'll gointo kind of our our real life
example here um and a little bitof kind of what those agreements
(16:00):
began to look like and see butfrom a But he dove deep down
into how these agreements weremodifying and changing,
especially as Noel talked aboutthe local coverage
determinations and requirements.
At the end of the day, medicalnecessity was not being met.
The patient visits were notbeing conducted appropriately.
And because Medicare was notpaying for these physicians or
(16:23):
telehealth prescribers to writethe orders, at the end of the
day, it was monies coming fromDME providers and was ultimately
a kickback.
So that's kind of the naturalevolution that I saw and still
continues on to this day, givenwhat we saw with the COVID and
the waivers with the telehealthvisits.
SPEAKER_02 (16:42):
And look, I want to step in and say, one of the big
things that really is importantabout these cases and about how
this all unfolds in individualsituations is really kind of
going to what Noel and Mike weretalking about.
What does the individual personactually know at the time,
right?
Because you can make mistakesyou can misunderstand things and
(17:03):
it's not a crime, okay?
It's not a crime if you make amistake or get things wrong.
It is a crime if you act what'scalled willfully under the law,
meaning that you acted withknowledge that your conduct was
illegal.
That's the key thing in acriminal prosecution for
healthcare fraud oranti-kickback statute
(17:24):
violations.
And that's one of the big thingsthat I deal with as a defense
lawyer, because I do thinkPeople make mistakes.
People get things wrong all thetime.
It's not a crime.
And so that's the big thing.
So yeah, so look, there arepeople who maybe arguably could
have known, should have knownbetter.
That's not a crime.
It has to be the people whoactually knew.
(17:45):
And so that's one of the bigthings that happened in the
Brace Yourself cases and howcases unfold were really that
issue is I think the big issuein how all these criminal cases
unfold.
And so- That's a larger issue.
And that actually becomes a bigpart of the example we're going
to get to.
So let's talk about that.
So in the wake of OperationBrace Yourself, lots of changes
(18:08):
in the DME industry.
And we're going to talk about areal life example involving real
companies run by real people wholistened to real people who they
shouldn't listen to.
And they know that now inhindsight.
You know, this case, actually,everything we say is actually in
the public record.
(18:29):
And actually, but, you know, butjust for purposes of this
discussion, we're going tobasically just anonymize
everyone's name.
But everything here is in thepublic record.
And actually, as you're going tounderstand, actually, privileges
have been waived, which allows,makes it possible for us to talk
about this case and actually useit because we think it is
actually hopefully educationalfor everyone out there.
(18:52):
So Basically, this case involvescompanies, DMV companies that
were started and run by thesetwo business owners who I'm
going to refer to as owner oneand owner two.
To be honest, kind of going towhat Mike was saying earlier,
they did not know much about theDME business beforehand.
They talked to several people.
They had some experience withhealthcare.
They heard about thisopportunity and they talked to
(19:15):
people who basically thoughtthis was a good opportunity to
get in and do things right andhelp people.
And they ended up working with aspecific biller who came very
highly recommended and who hadsome very impressive
credentials.
And that biller, end up beingtheir main advisor on the DME
billing, and that biller endedup running a lot of their
(19:37):
operations, includingrecommending a marketer.
And that marketer, who wasagain, highly recommended by
this biller, that marketer endedup doing a lot of the same
things that were problematic inthe Brace Yourself cases,
including heavily relying on anoverseas call center And
(19:58):
basically, you know, one way oranother, somehow basically cold
calling patients and basically,you know, even sometimes
possibly even harassing patientsinto basically saying they
needed braces when they didn't.
And so, and a lot of that stuffwas going on.
And Biller was also doing thingson top of that, that were
(20:21):
problematic while telling ownerone and owner two that
everything was okay.
For example, the biller handledcustomer complaints and refunds,
and the biller told the ownersthat the refund rate was very
low and was below industryaverage when it wasn't.
So, and again, all this goes to,again, so again, the key thing
in all these cases is kind ofknowledge and willfulness.
(20:45):
And so basically, So a lot ofthis goes to what people
actually knew at the time.
And in both cases, in terms ofwhat the market was doing, in
terms of what the biller wasdoing, a lot of that was going
on behind the scenes and theowners, unfortunately, didn't
even know it.
Okay.
So the owners run theircompanies for about a year,
trusting their biller.
And then, fortunately, theytalked to Noel.
(21:08):
They came to Noel and Noelraised a lot of concerns about
what he was hearing them talkabout their businesses.
So Noel, and that's part of whatwe want to talk about here, kind
of how Noel and Michael end uphelping these two owners get out
of the situation.
Noelle, can you talk about howabout your interaction with the
owners?
SPEAKER_03 (21:27):
Yes.
I mean, I remember the dayclearly they walked into our
office in Florida and they hadsome issues with a few claims
not being paid and they wantedto get an opinion as to how to
get those particular claimspaid.
So as I typically do, I said,tell me a little bit about your
operation.
Tell me about what's going on.
(21:48):
And they began to give me thefacts very confidently, I must
say, because they're well Andthey basically started
explaining to me what they'redoing.
And I said, well, you can't dothat.
And they're like, what do youmean I can't do that?
And I started to get into thespecifics of why certain billing
(22:08):
would not be permitted.
And even if the claims are paidbecause edits were not built at
the time to prevent those claimsfrom being paid, it would not be
appropriate because of thespecific regulations that had
already been published.
Somewhat ambiguous, but a goodtactician, a good biller should
at least have certain basicunderstanding what should or
(22:30):
should not be appropriate.
So we had that conversation.
We kind of went through theentire billing operation and I
point to specific areas that Ibelieve are compliance concerns,
right?
And I pointed out, even if youdo get paid, that doesn't mean
that you're entitled to thepayment because Medicare is an
honor system.
(22:50):
They rely on you to assertcertain things when you build
certain modifiers and certaincodes.
So if all the facts are notaligned, then you are
essentially putting yourself atrisk for recoupments and even
worse, civil or false claimsviolations or criminal
violations.
(23:11):
And the provider was reallygood.
They were well informed by theirconsultant, their biller.
If I didn't know what I did, Iwould have been convinced by
them how confident the ownerswere.
But I made them this one bit.
(23:32):
I said, well, listen, I'm prettyconfident what I'm telling you
is correct.
I understand that you've beengiven this information and I
understand why you're persuadedbecause it makes logical sense.
I'll do you one solid.
I'll refer you over to MichaelSilverman.
And if he gives you a blessing,then absolutely come back to me
and we can have a discussion forme to help you with your
billing.
(23:52):
But that is the only conditionthat you go to Michael, you lay
out the exact same set of factsthat you shared with me that I
told you to be incorrect.
And if Michael says, go ahead,then come right back over to my
office and we can start talkingabout a billing agreement.
Obviously, I knew that wouldnever happen because I knew
Michael very well and we seethings eye to eye from a
(24:15):
compliance.
But in this instance, eventhough he wasn't a client,
Stephen, Michael and I reallytake pride in trying to advise
the industry, right?
And it's not about just getsigning him on a client, but he
is someone who evidently from myinitial conversation didn't
fully understand the gravity ofwhat was going on, right?
(24:37):
So I felt pressed and obligatedas sort of someone who takes
compliance very seriously for meto give him that advice.
I didn't even charge him becauseI didn't have a formal
agreement, but I sent him overto Michael and knowing the great
tactician Michael is, I had nodoubt that the answer that he
(24:57):
would have gotten.
So I'll probably turn it over toyou, Michael, to probably get
more into that detail ofspecifically what you did.
SPEAKER_01 (25:05):
Thank you for your kind words, Noel.
And thank you for sending thesefolks over to me, because
otherwise we may have not hadthe conversation that we're
having today about the goodoutcome that ultimately was
founded after the terrible stuffthat these good folks went
through.
So owner one and owner two cameto me through Noel's advice, and
(25:26):
they became a client of minethrough their DME company.
And this was in the wake ofOperation Brace Yourself, where
I had folks left and rightcoming to me with inappropriate
appropriate relationships goingon, folks that were getting
indicted left and right, theirPTANs revoked, tons of monies
being owed back.
So of course, and given mybackground of being raised in
(25:47):
the industry, looked at themwith a cocked eye when they came
to me telling me they were doingtelemedicine, right?
Especially coming from Noel, whowas like, hey, told these guys
what they're doing, probablyshouldn't be doing it, and want
you to really show them the insand outs of why.
And although these twoindividual owners of the
business did not come in with abackground, a legal
(26:09):
understanding of the DMV space.
They certainly were two very,very intelligent individuals who
did a lot of internal researchand worked with their billing
company and did investigation tobecome intelligible in the
space.
And really, they pushed backagainst Nolan.
They pushed back against me realhard.
And it took about three to fourweeks after my initial meeting
(26:31):
with these two individuals forme to really hit home with what
I was saying, for them to take astep back, although they were
big believers in themselves, andthen for them to kind of wave
the white flag and to acquiescein what I was saying here.
The first problem, you know, outto get with these folks and with
many different folks thatpresent to me is that they're
(26:52):
taking compliance advice fromsomebody who has skin in the
game.
They're billing, right?
Everybody and their aunt anduncle these days in the DME
space especially, callingthemselves compliance officers,
experts in this space.
A billing company that has skinin the game insofar as getting a
percentage of the reimbursementof the DME provider that they're
collecting, they want them tocollect as much as possible.
(27:16):
So to get a referral to amarketing provider from your
billing company who's got skinin the game, probably mistake
number one for these guys.
But these folks came over to meand they presented me one of
those, let's call it a lipstickon a pig contract after the
blatant anti-kickback issuesthat I saw before Operation
Brace Yourself.
This was a situation where theycould swear up and down that the
(27:39):
folks that they were doingbusiness with, no funds were
flowing from the DME company tothe telehealth providers.
Telehealth providers werebilling the patients directly,
or Medicare directly, or gettingpaid by those providers, and
that there was no undueinfluence.
I took a step back.
I appreciate that.
I took that all in.
(27:59):
And for a lot of folks who arenot familiar with the
intricacies of coveragerequirements like Noel or myself
are, you're taking a look backand looking at the safe harbors
to the anti-kickback statutesand saying, hey, they're paying
a flat rate fee.
This may fall within theconfines of the safe harbor,
right?
Where you've got a regulation,you've got 35 exceptions.
(28:21):
And heck, this may have been oneof them.
However, when we did a furtherdive into So we're prescribing
orthotic braces and the Medicarecoverage criteria says you need
to perform certain laxity orrange of motion tests.
Let's dive into the medicalrecords that Medicare may indeed
request upon audit to showmedical necessity and
(28:42):
justification.
How were these telehealth visitsbeing conducted?
Was it audio only?
Was it a two-way audio videowhere you could even see the
patient?
You got to understand theserelationships with the
telehealth providers, there wasno pre-existing relationship
between the patient andphysician.
This was a brand new one-off.
So it's not like there's yearsand years of charters that could
be relied upon there.
(29:02):
And in doing those intricatedives and looking, even when
there was a two-way audio videoconnection that may properly be
billable to Medicare and paid byMedicare, could you really do
those required tests that wouldbe required to be performed to
evidence medical necessity?
So again, after several weeks ofpushback between both owner one
(29:24):
and owner two, who, you know, I,I was happy to see some pushback
because a lot of clients takeyour word as gospel, and I'm
always open to what my clientshave to say and to dive into the
intricacies and explain it tothem.
They saw at the end of the daythrough my explanations that my
concern was very real.
(29:46):
I mostly had concern from acivil monetary perspective
because I didn't see any intentto break the law or to pay any
kickbacks based upon what theyhad shared with me.
But I certainly at the veryleast saw issues with the
medical necessity and criteriaand that not being met.
After much back and forth andafter several weeks, owner one
(30:09):
and owner two came back to meand said, hey, you know what,
Mike?
We see that this may be moretrouble than it's worth, and we
are going to stop doing businessas we've been conducting it up
until this point.
SPEAKER_03 (30:21):
And Stephen, I probably wanted to just throw in
there too, because I hadconversation with them even when
they came back, because I tellthem, you have to kind of get an
opinion from Michael before youcome back to me.
And even when they came back tome, I don't think they were
fully persuaded that whatMichael said was correct.
That's how indoctrinated theywere based on their previous
(30:45):
biller, right?
But they're saying, well, Ithink these people kind of know
what they're saying.
So I'm just going to trust thefact that what they're telling
me is accurate, but I'm stillnot persuaded because I've been
drinking that Kool-Aid for solong, right?
So I think that's also a veryimportant point.
And just really to get slightlynuanced, one of the issues also
(31:05):
had to do with the fact thatcertain orthotics require custom
modification, right?
And this is how really nuancedthis is, and that's why it's
always important to have theright team.
It's the exact same brace, butit's built different way.
So I mean the exact product fromthe manufacturer, Michael and
(31:26):
Steven, but it's built twodifferent ways depending on what
adjustment is done at the timeit's being delivered, right?
So if it's just an off the shelfand adjustment done by the
patient, it's built with aseparate HICPIC code, versus a
custom that requires a licensedor certified individual to
modify that brace to fit thepatient's particular need.
(31:49):
And one of the nuance was thesupplier was able to build both.
because of how they werelicensed.
But it's not about thelicensure, it's about the
individual delivery.
And that was something thatwasn't explained or led them to
believe otherwise, that it'sonce you're credentialed to bill
for a certain code, you are ableto bill for it.
(32:13):
So it goes back to what I said,not because you're paid, meaning
that you're entitled to it.
There are rules and regs thatneeds to be followed.
To you, Stephen.
SPEAKER_02 (32:22):
In terms of, so Michael, going back to your
interactions with owner one andowner two.
So look, it took weeks for youto get through to them, right?
So in that time, I think yousent like, did you rely just on
telephone conversations, but, ordid you actually send
documentation to them?
What kind of, how did you, howdid you try to convey your
(32:45):
message?
I mean, you understood that theydidn't just get it all 100% the
first time you talked to them,right?
I mean, so how did you actuallyconvey all your advice to them?
SPEAKER_01 (32:54):
You know, our first meeting was probably an hour, an
hour and a half.
And again, in person with a lotof back and forth and pushback.
The laws that we talk about inthe health care space are very,
very nuanced for every law thatwe have.
We've got practically a dozenplus exceptions for each one,
each one.
And we're talking about multiplelaws that were implicated by
this.
(33:14):
So in follow up to my hour and ahalf initial meeting with them,
they probably got a 10 or 15page email that specifically set
forth.
Here's what I understand.
about what you're doing.
Here's the laws that I believethat apply.
And here are the options and therisks as far as proceeding
forward accordingly.
Really breaking down theinformation that we discussed
(33:36):
because I don't expect myclients in such a nuanced
industry, especially who are notlicensed healthcare
professionals, to take it all inand digest it.
And so to have this informationat their fingertips to review
and digest in the many nightsthat I'm sure that they did from
our meeting is just vital inthis space.
(33:57):
There's so much room formiscommunication and
misinformation andmisunderstanding.
And so I, to this day, believeit's vital in this space so that
everything's clear and folks canfall back upon it to put
everything in writing to ourclients when there are so many
nuances involved.
And so in that two-week period,as Stephen, you went through,
(34:18):
and you'll talk about later, I'msure, dozens and dozens of email
correspondence.
SPEAKER_02 (34:24):
Yeah, and I think that's what's, and that is, I
think, one thing that was veryimpressive about what Michael's
interactions with owner one andowner two.
It was multiple conversationsand multiple writings.
There were emails, there werememos, there was more emails.
It was a back and forth process.
So, and I think, Michael, Ithink the big thing was, I mean,
in your interaction, I mean,when you sent your memo to them
(34:46):
about kind of going through, didyou just automatically assume
that they fully understood everysingle thing you sent them just
because you sent it in a memoone day?
SPEAKER_01 (34:53):
No, this is a review, digest, and let's set a
call to discuss it and make surethat we understand it.
SPEAKER_02 (35:00):
Yeah.
And I think that's reallyimportant because ultimately,
this is really confusing stuff.
It's really confusing stuff.
I think it's confusing forlawyers, to be honest.
And if it's confusing forlawyers, it's really confusing
for clients out there who aretrying to navigate things,
especially lawyers.
if they're getting conflictingadvice from other people.
And I think Noel and Michaelboth refer to this, but owner
(35:22):
one and owner two, as they'retalking to Noel and Michael,
they were hearing from...
the biller they had that Noelleand Michael didn't know what
they were talking about.
Forget about it.
So, and that was one of theissues that I think Noelle and
Michael were trying to deal withbecause they were trying to talk
to owner one and owner two.
And basically while someone elsewas telling them to disregard
(35:43):
everything they were saying.
So, Michael, I mean, ultimately,so how did you get through?
I mean, what did it take to getreally, to get through to them
and kind of help them understandwhere you were coming from?
SPEAKER_01 (35:54):
I think Knoll played a great big part of that as
well, because as they went totheir billing company or biller
and expressed disbelief ordistrust or not necessarily
fully understanding what I wassaying, they went to Knoll with
the same.
And it took really diving intothe LCDs from a legal and a
(36:15):
biller perspective for them tosee that not only may there be
some ambiguity there, but theymay be falling on the wrong side
of gray with respect to thestate of the industry and what
was going on.
So I think at the end of theday, given that we were coming
out of Operation Brace Yourself,and although, of course, their
actions didn't come close tomirroring what the folks did
(36:38):
that got caught up in thoseinitial arrests and indictments,
they saw at the end of the daythat it wasn't worth building a
business around something thatcould have that ambiguity or
worse.
From my understanding.
SPEAKER_03 (36:50):
Yeah, and Steven, you touched on this as well.
You know, posts, brace yourself.
there was some guidance thatcame out from the government.
I think that also helped in ourendeavors, because subsequent to
that, Medicare came out withsome guidance that was on the
side of what Michael and I havebeen saying over the last couple
(37:10):
of weeks.
So the timing, I guess, wasperfect, and they actually saw
that what we said was great.
And Michael touched on thisearlier, but not all billing
companies are created equal,right?
And it's really just thereality.
And we just have to make surethat we're adherent to the
rules.
(37:31):
Where there is gray areas, weerr on the side of caution
because, you know, one of my lawprofessors put it this way, the
healthcare space is like aminefield with tripwires in
every direction you step.
And that's the reality.
So, you know, if in doubt, it'sbest for you to proceed with
caution and get good advice.
People who don't have stake inthe game or people who are gonna
(37:54):
give you the advice, regardlessif it benefits them directly or
indirectly or not.
They're gonna give you the rightadvice.
I
SPEAKER_01 (38:01):
would add a blindfold to running around in
that minefield with respect tothat analogy, and it's
wonderful, Noel.
SPEAKER_02 (38:08):
As a result of all their conversations with Noel
and Michael, owner one and ownertwo decide to shut down their
business entirely.
They still thought they had beendoing the right thing and doing
things correctly.
And they were still hearing fromtheir biller that Noelle and
Michael didn't know what theywere talking about.
But they understood Michael'sconcerns, even if they didn't
fully understand everythingMichael was saying.
(38:30):
And they decided they wanted toshut down the business.
They wanted to do the rightthing, and they understood the
advice about the risks.
So they shut this all down.
And then...
But unfortunately, that wasn'tquite the end of the story.
But before we get to that,Noelle, Michael, just any
thoughts for our audience abouthow to convey all this stuff to
(38:53):
clients?
These are difficult concepts.
Any advice you have to givepeople in trying to explain
these concepts to them?
Michael, why don't we start withyou?
UNKNOWN (39:03):
Sure.
SPEAKER_01 (39:03):
I think a major takeaway for attorneys or other
advisors that may be watchingthis, in advising individuals
and clients in such a complexspace, make sure that the
message is heard and is conveyedand is understood as much as
possible.
Even if your clients may notagree with the message that is
(39:24):
being heard or conveyed, makesure that they understand it.
We're dealing with very, verycomplex issues and regulations,
a law with 50 Jamal?
SPEAKER_03 (39:51):
Yeah, and I'll say is from the provider
perspective, always try to seek,not all builders are created
equal, not all consultants arecreated equal.
Maybe it's helpful to probablyget the opinion of multiple and
compare them all to see whatmakes sense, right?
And just make sure that theadvice you're getting, there's
(40:13):
no other ulterior motives orother incentives tied to that
that would influence thedecision that you get.
Billing can be very complex.
I've been asked as a subjectmatter expert to be involved
with a lot of cases that havevery nuanced policies and
nuanced billing requirementsthat probably is not common
(40:37):
sense to the average person,right?
So I say, just make sure thatyou get proper guidance from an
appropriate individual with theexperience and with the
integrity and who putscompliance at the forefront.
And for consultants, make sureyou document everything, every
conversation that you have withanyone that have always have it
(41:00):
memorialized in an email or amemo, just so that it's clear
what the position is becausesometimes you may have a
conversation and what someonetook away from it may not
necessarily mean what you meantto communicate but having a
follow-up email thatmemorializes the conversation
gives them a second opportunityto say well okay this is not
(41:23):
what i actually understood fromour conversation can you clarify
and then allow for as muchdialogue as possible until they
actually get it.
But those are just really someof the takeaways that I would
definitely encourage bothproviders and consultants who
are involved in this verycomplex minefield of called
healthcare compliance.
SPEAKER_02 (41:46):
As I said, unfortunately, talking to Noelle
and Michael was not the end ofthe story.
So unbeknownst to owner one andowner two, the federal bureau
investigation had already openedan investigation into owner one
and owner two's business,actually even months before they
(42:07):
even met Noel and Michael.
And even though they shut downthe business, the FBI continued
their investigation.
And two years after owner oneand owner two talked to Noel and
Michael, they were charged infederal court with healthcare
fraud crimes and violations ofthe anti-kickback statute, all
relating to the DME businesses.
(42:30):
And that's where I and anotherlawyer, Jonathan Meltz, came
into the story.
And that's what we're going tocover in part two of this
podcast.
So I want to thank Noel andMichael for everything they did
on behalf of owner one and ownertwo, which we will come back to
in part two.
And we will, I hope you comeback and hear the rest of the
(42:52):
story.
And thanks again, everyone.
SPEAKER_00 (43:01):
To subscribe and add this private podcast feed to
(43:26):
your podcast app, go toAmericanHealthLaw.org slash
Daily Podcast.
you
This episode of AHLA's Speaking of Health Law is
brought to you by AHLA membersand donors like you.
For more information, visitAmericanHealthLaw.org.
SPEAKER_02 (00:17):
My name is Stephen Lee, and I'm an attorney in
Chicago who used to be a federalprosecutor and used to be the
senior counsel to the ChicagoU.S.
Attorney's Office's HealthcareFraud Unit.
And I'm happy to be here forpart one of a two-part podcast
talking about Operation BraceYourself and a real-life example
of how lawyers can help theirclients through some very
(00:39):
difficult circumstances.
I have with me today two otherpeople who were involved in this
real-life example, Noelle Nealand Michael Silverman.
Can you two introduceyourselves?
Start with Noel.
SPEAKER_03 (00:51):
Oh, hi.
My name is Noel O'Neill, thechief compliance officer at
AccuServe.
AccuServe is one of the largestDME billing companies in the
country.
So we have a wide cross-sectionof clients doing pretty much
everything that is involved inDME.
So happy to be here, Stephen.
Michael, turn it over to you,sir.
SPEAKER_01 (01:14):
Hey, everybody.
Pleasure to meet you.
Attorney Michael Silverman here.
I am an attorney and foundingpartner with the law firm of
Silverman Bain that is locatedin South Florida, specializing
in representing healthcarebusiness owners and medical
professionals born and raised inthe DME industry myself, which
is what primarily we'll betalking about from an Operation
(01:35):
Brace Yourself perspective.
So for better or for worse, alarge part of my practice is
representing and working withDME providers given that I'm
born and raised in the space andand happy to be here and to
share some very interestinginformation with our folks that
are attending.
SPEAKER_02 (01:52):
All right, great.
So let's go back to OperationBrace Yourself, which was a
Department of Justice operationthat occurred in the spring of
2019 and then involved severalhigh-profile arrests relating to
durable medical equipment,fraud, kickbacks, and the like.
So Most of you probablylistening to this have probably
(02:13):
heard about this, but let's goback and just take a look back
at that.
Michael, can you just summarizeOperation Brace Yourself for our
audience?
SPEAKER_01 (02:21):
Happy to do so.
So Operation Brace Yourself wasone of the largest takedowns in
Department of Justiceenforcement actions, not only in
the durable medical equipmentindustry, but in the history of
the Department of Justice andhealthcare fraud actions.
It was announced on April 9th,2019.
I've got some interesting factsand figures that I don't want to
(02:42):
get wrong here.
On April 9th, 2019, there was 80search warrants executed in 17
federal districts.
There were 24 individualindividuals charged with over
1.2 billion in losses attributedto those individuals.
In addition to the charges thatwere announced and those losses,
actions were taken against 130different BME companies
(03:05):
nationwide who had submitted 1.7billion in claims and had been
paid over$700 million by thefederal government.
And this was a very, veryinteresting takedown in the DME
space, especially from myperspective, somebody who
watched everything begin tobubble and fizzle around it.
This takedown not only involveddurable medical equipment
(03:28):
providers themselves, but alsomarketing companies and health
care professionals that werealso charged.
And this was such a big takedownand enforcement action that over
five years later to this day,we're still dealing with ongoing
indictments and arrests that arestemming out from this massive
operation.
Noel, tell me, tell us a littlebit from your perspective what
(03:49):
you were seeing going on in thebilling space.
SPEAKER_03 (03:52):
Sure, yeah.
I mean, it was a big deal and itjust really blossomed.
I think anyone and everyone whowatched late night TV back then
prior to 2019 would have seenone of those ads on the screen,
right?
Where, do you have back pain?
Call this number.
right um i think we're allplagued with that but really in
(04:12):
summary for for those of us whowell if you've never heard of
operation brace yourself justkind of very high level what it
really is is um marketers wouldhave these ads where people will
pretty much opt in or call in tosay hey i have back pain and
they will speak to someone mayor may not be in the US.
It could be some remote offshorecall center.
(04:35):
They'll ask them some probingquestions.
What's your pain level, etcetera.
And then they will generate thisbeautiful progress note that
sort of mirrors the requirementsfrom the LCD.
And the LCD is the localcoverage determination.
That is the document thatMedicare has established to
determine coverage for thesebraces.
(04:56):
And then the marketer will takethat information, get doctors,
in some cases, would review itand allegedly in some cases the
doctor actually never spoke withthe patient but just took that
progress note and signed off andmarketers will take those
progress notes and then marketthem to DME companies and
they'll say well we'll give youthis sell you these order for a
(05:17):
certain amount and allegedly theDMEs will pay for that furnish
the braces and then they bill itto Medicare.
And I'm sure we'll dissect thatsurgically as we get through
this discussion, but that's justa very high level of the
process.
And obviously some people buildit themselves and others have
(05:38):
reached out to billing companiesto submit the bill on their
behalf.
But we've taken a very hardstance on this because of the
red flags that were involved andwe'll talk about this as we get
into the specifics.
That's a very high level forBrace Yourself.
It seemed like it was reallysimple.
It's a couple of codes that weresubmitted to Medicare, not a lot
(05:59):
of modifiers, at least at first.
So a lot of providers actuallyattempted to build those by
themselves.
And there are some others in theindustry that were a part of
that clique, if you may, whohelped and facilitated that
building.
So back over to you, Stephen.
SPEAKER_02 (06:17):
Yeah, so look, this was a huge operation that had a
lot of ripple effects, and we'regoing to be talking about those
ripple effects and the rest ofpart one and in part two.
But I think basically I want togive a little thought is from my
perspective.
And so I was a federalprosecutor.
I did not work as a federalprosecutor in any of the
Operation Brace Yourself cases.
(06:38):
I have been involved in some ofthe related cases as a defense
lawyer.
But I think what's reallyinteresting about Operation
Bridge itself is I actuallythink that there's some really
missed opportunities here.
And I actually think that thiscase all could have unfolded
very differently if thegovernment had been actually
more on top of things.
(06:58):
They talk about this case as abillion dollar case.
It should not have ever gottento be that big.
There are all these red flags.
And the government saw a lot ofthese red flags at the time.
One of the big things I see whenI look back at the data is that
there was this huge shift in theMedicare billing.
And you can even see this in thepublicly available data.
(07:20):
Five years before, you know,five years earlier, there was
like no one in the country whoordered large amounts of
prosthetics and orthotics thatwere billed to Medicare.
Just no one.
No one was billing large amountsor no doctor was authorizing
large amounts.
And then you started to see thisshift where suddenly, there were
these doctors and medicalprofessionals who were suddenly
(07:42):
ordering large amounts ofprosthetics or orthotics,
including people who didn't evenspecialize in a field that even
made any sense to do that.
I think I saw like one OBGYN atleast.
And so there were these redflags that this was happening
around the country.
And, you know, I really thinkthis is the kind of thing that,
(08:02):
you know, be honest betterregulation could have actually
clamped down on because allthese red flags the government
talks about now they werepresent before doctors ordering
huge amounts doctors who weren'tin the right specialty ordering
large amounts and also doctorsauthorizing things for patients
whom they didn't really havemuch of any contact with so all
these things were there in thedata and i really think this is
(08:24):
something that could have beendealt with um and so And so, but
it is a widespread problem andinvolves improper billing,
there's improper marketing, andclearly like doctors ordering
things that obviously shouldn'thave happened.
But the big question behind allthis is like, how did this come
about and why?
We're not gonna get into allthat here, okay?
(08:45):
Because what we really wannafocus on is the after effects of
operation for yourself.
SPEAKER_03 (08:50):
And Steven, just before you move on, I wanted to
throw this in there too, becausereally just to preface by saying
that a lot of this happenedprior to the public health
emergency when the rules fortelehealth, which was
purportedly the vehicle thatallowed these schemes, strictly
required that patients could notbe evaluated in their home,
(09:12):
right?
Which is where allegedly theseencounters had occurred.
Patients were required to be ateither approved sites other than
home.
So that utilization wheresupposedly the telehealth could
be used as a vehicle tofacilitate these order was just
one of those evident red flags,right, that this was a problem.
(09:36):
But you're right.
I think the data really speaksfor itself.
And the government was morereactive than they could have
been proactive.
As you said, the data show thespike and show the pattern.
So you're spot on with youranalysis.
SPEAKER_02 (09:51):
And you know, one more thing that happened, like
Michael talked about some of theactions the government took.
They also did make a lot ofregulatory changes going
forward.
So now there was, to the extentthere was ambiguity in some of
the regulations before 2019, alot of that is now more clear.
There are things now that cannotbe ordered under certain
circumstances that peoplethought were okay beforehand.
(10:13):
Okay.
Anyway, but the big thing wewant to talk about today is how
companies basically in the wakeof Operation Brace Yourself,
clearly a lot of companies inthe DMV space were trying to
figure out how to navigate this,how to go forward and try to
basically comply with,especially given everything they
learned as a result of all this.
(10:33):
So Noelle, Michael, can you talkabout this a little bit?
What were you seeing in terms ofhow companies were trying to
deal with the aftermath ofOperation Brace Yourself and the
changes they made in order tocomply?
Noelle, why don't you start?
SPEAKER_03 (10:44):
Sure.
Yeah.
So, I mean, I remember clearlythe news alerts and emails and
everybody really becomingfrantic and asking and reaching
out.
And I think really people Becameaware of things that others have
always been saying that waswrong right are people that had
(11:07):
concerns about certain aspect ofit, but it became apparent now
because now the government isinvestigating it right, so we
see providers.
Some.
evidently continue to do whatthey're doing right because some
of them felt that they would notbe caught and and that's why
there's some residual um andi'll also probably say this
(11:29):
though stephen i think they'refolks who got caught up in
operation brace yourself notthat they had any ill intent but
i think it's just that they wereill-advised or that they lack
the education necessary from abilling perspective, right?
So I'm not gonna say thateverybody involved or everybody
that was implicated really trulyhad really ill intent.
(11:52):
And I think that's evident byOnce folks were made aware that
it was wrong, some folks havesought guidance and counsel to
make sure that theirunderstanding of what they were
told previously prior to theindictments and the news release
was accurate.
So we saw a lot of folks thatreached out to us at AccuServe
(12:13):
and asked questions, asked somespecific billing questions.
And we were able to provide somepoignant guidance and based on
the guidance that was availableat the time as to why there were
concerns in certain areas, andfolks have taken on those
guidance.
And I'm sure Michael has seen itfrom a different perspective
from the termination letters andstuff like that.
So, Michael, won't you justspeak about your specific
(12:36):
experience and what you saw?
SPEAKER_01 (12:39):
To understand Operation Brace Yourself, you
really have to take a step backand get an idea of the DME
industry itself.
These are unlicensed workers.
individuals who can becomeowners of these businesses who
don't have to employ or engageany licensed healthcare
professionals and canessentially hit buttons to
electronically bill and submitclaims.
(12:59):
So the ability to bill Medicarefor these type of equipment, the
barrier to entry to begin withis pretty low.
And what has happened over theyears, as with a lot of the
different retail industries,it's become very difficult for a
supplier of orthotics ordiabetic testing supplies in a
retail walk-in setting to makeends meet between the cuts in
(13:22):
reimbursement and the cost ofgoods and the increasing cost of
everything.
So what happened is folks turnedto online lead generation, mail
order supplies, and marketersdid what they did best.
They got interested individualswho wanted to use supplies, but
a pipeline developed where youhad all these folks who wanted
supplies, but they couldn't getprescriptions from the providers
(13:46):
to write orders for thosesupplies to fulfill them.
And so in about 2016, 2017, inmy practice, a lot of different
DME companies started presentingme with prospective marketing
agreements, relationships witheither telehealth, and I say
telehealth in air quotes becausea lot of this is not telehealth.
(14:07):
Telehealth is a good thing inthe wave of now and the future
when done correctly.
This was telefraud.
This was agreements between DMEcompanies and either marketers
or tech platforms or healthcareproviders directly where for
every order that was receivedback in exchange for this
relationship, this platform orprovider or marketing company
(14:31):
was paid X amount hours perorder it was a blatant kickback
situation fraud from myperspective.
This started building up in 17,2018.
The red flags and warning signswere going off everywhere.
And from a data analyticsperspective, the government
could have hopped on this muchsooner and nipped it in the bud
so that so many lives weren'taffected and ruined over, again,
(14:53):
a lot of this is ignorance andnot intent to break the law, but
the law is very clear and that'softentimes what it was.
And so Operation Brace Yourselfoccurred on April 9th, 2019.
You know, anyone who doesn'tlive under a rock, especially in
the industry, had heard of it.
And so what I saw afterOperation Brace Yourself is
folks who weren't completelyscared that knew what they were
(15:16):
doing was wrong.
I saw a lot of lipstick going onthe pig insofar as a lot of
these workers, Agreements keptcoming to my desk wherein it
wasn't X dollars per order thatwas returned to the DMV supplier
or X dollars per order that wassubmitted Requested to be seen
by the telehealth provider.
They were paying what theycalled platform technology fees
(15:39):
where it was X dollars or accessor in tranches depending on the
amount of individuals that wereseen by the telehealth company
or telehealth provider and sothat's what I began to see in
the summer of 2019 and we'll gointo kind of our our real life
example here um and a little bitof kind of what those agreements
(16:00):
began to look like and see butfrom a But he dove deep down
into how these agreements weremodifying and changing,
especially as Noel talked aboutthe local coverage
determinations and requirements.
At the end of the day, medicalnecessity was not being met.
The patient visits were notbeing conducted appropriately.
And because Medicare was notpaying for these physicians or
(16:23):
telehealth prescribers to writethe orders, at the end of the
day, it was monies coming fromDME providers and was ultimately
a kickback.
So that's kind of the naturalevolution that I saw and still
continues on to this day, givenwhat we saw with the COVID and
the waivers with the telehealthvisits.
SPEAKER_02 (16:42):
And look, I want to step in and say, one of the big
things that really is importantabout these cases and about how
this all unfolds in individualsituations is really kind of
going to what Noel and Mike weretalking about.
What does the individual personactually know at the time,
right?
Because you can make mistakesyou can misunderstand things and
(17:03):
it's not a crime, okay?
It's not a crime if you make amistake or get things wrong.
It is a crime if you act what'scalled willfully under the law,
meaning that you acted withknowledge that your conduct was
illegal.
That's the key thing in acriminal prosecution for
healthcare fraud oranti-kickback statute
(17:24):
violations.
And that's one of the big thingsthat I deal with as a defense
lawyer, because I do thinkPeople make mistakes.
People get things wrong all thetime.
It's not a crime.
And so that's the big thing.
So yeah, so look, there arepeople who maybe arguably could
have known, should have knownbetter.
That's not a crime.
It has to be the people whoactually knew.
(17:45):
And so that's one of the bigthings that happened in the
Brace Yourself cases and howcases unfold were really that
issue is I think the big issuein how all these criminal cases
unfold.
And so- That's a larger issue.
And that actually becomes a bigpart of the example we're going
to get to.
So let's talk about that.
So in the wake of OperationBrace Yourself, lots of changes
(18:08):
in the DME industry.
And we're going to talk about areal life example involving real
companies run by real people wholistened to real people who they
shouldn't listen to.
And they know that now inhindsight.
You know, this case, actually,everything we say is actually in
the public record.
(18:29):
And actually, but, you know, butjust for purposes of this
discussion, we're going tobasically just anonymize
everyone's name.
But everything here is in thepublic record.
And actually, as you're going tounderstand, actually, privileges
have been waived, which allows,makes it possible for us to talk
about this case and actually useit because we think it is
actually hopefully educationalfor everyone out there.
(18:52):
So Basically, this case involvescompanies, DMV companies that
were started and run by thesetwo business owners who I'm
going to refer to as owner oneand owner two.
To be honest, kind of going towhat Mike was saying earlier,
they did not know much about theDME business beforehand.
They talked to several people.
They had some experience withhealthcare.
They heard about thisopportunity and they talked to
(19:15):
people who basically thoughtthis was a good opportunity to
get in and do things right andhelp people.
And they ended up working with aspecific biller who came very
highly recommended and who hadsome very impressive
credentials.
And that biller, end up beingtheir main advisor on the DME
billing, and that biller endedup running a lot of their
(19:37):
operations, includingrecommending a marketer.
And that marketer, who wasagain, highly recommended by
this biller, that marketer endedup doing a lot of the same
things that were problematic inthe Brace Yourself cases,
including heavily relying on anoverseas call center And
(19:58):
basically, you know, one way oranother, somehow basically cold
calling patients and basically,you know, even sometimes
possibly even harassing patientsinto basically saying they
needed braces when they didn't.
And so, and a lot of that stuffwas going on.
And Biller was also doing thingson top of that, that were
(20:21):
problematic while telling ownerone and owner two that
everything was okay.
For example, the biller handledcustomer complaints and refunds,
and the biller told the ownersthat the refund rate was very
low and was below industryaverage when it wasn't.
So, and again, all this goes to,again, so again, the key thing
in all these cases is kind ofknowledge and willfulness.
(20:45):
And so basically, So a lot ofthis goes to what people
actually knew at the time.
And in both cases, in terms ofwhat the market was doing, in
terms of what the biller wasdoing, a lot of that was going
on behind the scenes and theowners, unfortunately, didn't
even know it.
Okay.
So the owners run theircompanies for about a year,
trusting their biller.
And then, fortunately, theytalked to Noel.
(21:08):
They came to Noel and Noelraised a lot of concerns about
what he was hearing them talkabout their businesses.
So Noel, and that's part of whatwe want to talk about here, kind
of how Noel and Michael end uphelping these two owners get out
of the situation.
Noelle, can you talk about howabout your interaction with the
owners?
SPEAKER_03 (21:27):
Yes.
I mean, I remember the dayclearly they walked into our
office in Florida and they hadsome issues with a few claims
not being paid and they wantedto get an opinion as to how to
get those particular claimspaid.
So as I typically do, I said,tell me a little bit about your
operation.
Tell me about what's going on.
(21:48):
And they began to give me thefacts very confidently, I must
say, because they're well Andthey basically started
explaining to me what they'redoing.
And I said, well, you can't dothat.
And they're like, what do youmean I can't do that?
And I started to get into thespecifics of why certain billing
(22:08):
would not be permitted.
And even if the claims are paidbecause edits were not built at
the time to prevent those claimsfrom being paid, it would not be
appropriate because of thespecific regulations that had
already been published.
Somewhat ambiguous, but a goodtactician, a good biller should
at least have certain basicunderstanding what should or
(22:30):
should not be appropriate.
So we had that conversation.
We kind of went through theentire billing operation and I
point to specific areas that Ibelieve are compliance concerns,
right?
And I pointed out, even if youdo get paid, that doesn't mean
that you're entitled to thepayment because Medicare is an
honor system.
(22:50):
They rely on you to assertcertain things when you build
certain modifiers and certaincodes.
So if all the facts are notaligned, then you are
essentially putting yourself atrisk for recoupments and even
worse, civil or false claimsviolations or criminal
violations.
(23:11):
And the provider was reallygood.
They were well informed by theirconsultant, their biller.
If I didn't know what I did, Iwould have been convinced by
them how confident the ownerswere.
But I made them this one bit.
(23:32):
I said, well, listen, I'm prettyconfident what I'm telling you
is correct.
I understand that you've beengiven this information and I
understand why you're persuadedbecause it makes logical sense.
I'll do you one solid.
I'll refer you over to MichaelSilverman.
And if he gives you a blessing,then absolutely come back to me
and we can have a discussion forme to help you with your
billing.
(23:52):
But that is the only conditionthat you go to Michael, you lay
out the exact same set of factsthat you shared with me that I
told you to be incorrect.
And if Michael says, go ahead,then come right back over to my
office and we can start talkingabout a billing agreement.
Obviously, I knew that wouldnever happen because I knew
Michael very well and we seethings eye to eye from a
(24:15):
compliance.
But in this instance, eventhough he wasn't a client,
Stephen, Michael and I reallytake pride in trying to advise
the industry, right?
And it's not about just getsigning him on a client, but he
is someone who evidently from myinitial conversation didn't
fully understand the gravity ofwhat was going on, right?
(24:37):
So I felt pressed and obligatedas sort of someone who takes
compliance very seriously for meto give him that advice.
I didn't even charge him becauseI didn't have a formal
agreement, but I sent him overto Michael and knowing the great
tactician Michael is, I had nodoubt that the answer that he
(24:57):
would have gotten.
So I'll probably turn it over toyou, Michael, to probably get
more into that detail ofspecifically what you did.
SPEAKER_01 (25:05):
Thank you for your kind words, Noel.
And thank you for sending thesefolks over to me, because
otherwise we may have not hadthe conversation that we're
having today about the goodoutcome that ultimately was
founded after the terrible stuffthat these good folks went
through.
So owner one and owner two cameto me through Noel's advice, and
(25:26):
they became a client of minethrough their DME company.
And this was in the wake ofOperation Brace Yourself, where
I had folks left and rightcoming to me with inappropriate
appropriate relationships goingon, folks that were getting
indicted left and right, theirPTANs revoked, tons of monies
being owed back.
So of course, and given mybackground of being raised in
(25:47):
the industry, looked at themwith a cocked eye when they came
to me telling me they were doingtelemedicine, right?
Especially coming from Noel, whowas like, hey, told these guys
what they're doing, probablyshouldn't be doing it, and want
you to really show them the insand outs of why.
And although these twoindividual owners of the
business did not come in with abackground, a legal
(26:09):
understanding of the DMV space.
They certainly were two very,very intelligent individuals who
did a lot of internal researchand worked with their billing
company and did investigation tobecome intelligible in the
space.
And really, they pushed backagainst Nolan.
They pushed back against me realhard.
And it took about three to fourweeks after my initial meeting
(26:31):
with these two individuals forme to really hit home with what
I was saying, for them to take astep back, although they were
big believers in themselves, andthen for them to kind of wave
the white flag and to acquiescein what I was saying here.
The first problem, you know, outto get with these folks and with
many different folks thatpresent to me is that they're
(26:52):
taking compliance advice fromsomebody who has skin in the
game.
They're billing, right?
Everybody and their aunt anduncle these days in the DME
space especially, callingthemselves compliance officers,
experts in this space.
A billing company that has skinin the game insofar as getting a
percentage of the reimbursementof the DME provider that they're
collecting, they want them tocollect as much as possible.
(27:16):
So to get a referral to amarketing provider from your
billing company who's got skinin the game, probably mistake
number one for these guys.
But these folks came over to meand they presented me one of
those, let's call it a lipstickon a pig contract after the
blatant anti-kickback issuesthat I saw before Operation
Brace Yourself.
This was a situation where theycould swear up and down that the
(27:39):
folks that they were doingbusiness with, no funds were
flowing from the DME company tothe telehealth providers.
Telehealth providers werebilling the patients directly,
or Medicare directly, or gettingpaid by those providers, and
that there was no undueinfluence.
I took a step back.
I appreciate that.
I took that all in.
(27:59):
And for a lot of folks who arenot familiar with the
intricacies of coveragerequirements like Noel or myself
are, you're taking a look backand looking at the safe harbors
to the anti-kickback statutesand saying, hey, they're paying
a flat rate fee.
This may fall within theconfines of the safe harbor,
right?
Where you've got a regulation,you've got 35 exceptions.
(28:21):
And heck, this may have been oneof them.
However, when we did a furtherdive into So we're prescribing
orthotic braces and the Medicarecoverage criteria says you need
to perform certain laxity orrange of motion tests.
Let's dive into the medicalrecords that Medicare may indeed
request upon audit to showmedical necessity and
(28:42):
justification.
How were these telehealth visitsbeing conducted?
Was it audio only?
Was it a two-way audio videowhere you could even see the
patient?
You got to understand theserelationships with the
telehealth providers, there wasno pre-existing relationship
between the patient andphysician.
This was a brand new one-off.
So it's not like there's yearsand years of charters that could
be relied upon there.
(29:02):
And in doing those intricatedives and looking, even when
there was a two-way audio videoconnection that may properly be
billable to Medicare and paid byMedicare, could you really do
those required tests that wouldbe required to be performed to
evidence medical necessity?
So again, after several weeks ofpushback between both owner one
(29:24):
and owner two, who, you know, I,I was happy to see some pushback
because a lot of clients takeyour word as gospel, and I'm
always open to what my clientshave to say and to dive into the
intricacies and explain it tothem.
They saw at the end of the daythrough my explanations that my
concern was very real.
(29:46):
I mostly had concern from acivil monetary perspective
because I didn't see any intentto break the law or to pay any
kickbacks based upon what theyhad shared with me.
But I certainly at the veryleast saw issues with the
medical necessity and criteriaand that not being met.
After much back and forth andafter several weeks, owner one
(30:09):
and owner two came back to meand said, hey, you know what,
Mike?
We see that this may be moretrouble than it's worth, and we
are going to stop doing businessas we've been conducting it up
until this point.
SPEAKER_03 (30:21):
And Stephen, I probably wanted to just throw in
there too, because I hadconversation with them even when
they came back, because I tellthem, you have to kind of get an
opinion from Michael before youcome back to me.
And even when they came back tome, I don't think they were
fully persuaded that whatMichael said was correct.
That's how indoctrinated theywere based on their previous
(30:45):
biller, right?
But they're saying, well, Ithink these people kind of know
what they're saying.
So I'm just going to trust thefact that what they're telling
me is accurate, but I'm stillnot persuaded because I've been
drinking that Kool-Aid for solong, right?
So I think that's also a veryimportant point.
And just really to get slightlynuanced, one of the issues also
(31:05):
had to do with the fact thatcertain orthotics require custom
modification, right?
And this is how really nuancedthis is, and that's why it's
always important to have theright team.
It's the exact same brace, butit's built different way.
So I mean the exact product fromthe manufacturer, Michael and
(31:26):
Steven, but it's built twodifferent ways depending on what
adjustment is done at the timeit's being delivered, right?
So if it's just an off the shelfand adjustment done by the
patient, it's built with aseparate HICPIC code, versus a
custom that requires a licensedor certified individual to
modify that brace to fit thepatient's particular need.
(31:49):
And one of the nuance was thesupplier was able to build both.
because of how they werelicensed.
But it's not about thelicensure, it's about the
individual delivery.
And that was something thatwasn't explained or led them to
believe otherwise, that it'sonce you're credentialed to bill
for a certain code, you are ableto bill for it.
(32:13):
So it goes back to what I said,not because you're paid, meaning
that you're entitled to it.
There are rules and regs thatneeds to be followed.
To you, Stephen.
SPEAKER_02 (32:22):
In terms of, so Michael, going back to your
interactions with owner one andowner two.
So look, it took weeks for youto get through to them, right?
So in that time, I think yousent like, did you rely just on
telephone conversations, but, ordid you actually send
documentation to them?
What kind of, how did you, howdid you try to convey your
(32:45):
message?
I mean, you understood that theydidn't just get it all 100% the
first time you talked to them,right?
I mean, so how did you actuallyconvey all your advice to them?
SPEAKER_01 (32:54):
You know, our first meeting was probably an hour, an
hour and a half.
And again, in person with a lotof back and forth and pushback.
The laws that we talk about inthe health care space are very,
very nuanced for every law thatwe have.
We've got practically a dozenplus exceptions for each one,
each one.
And we're talking about multiplelaws that were implicated by
this.
(33:14):
So in follow up to my hour and ahalf initial meeting with them,
they probably got a 10 or 15page email that specifically set
forth.
Here's what I understand.
about what you're doing.
Here's the laws that I believethat apply.
And here are the options and therisks as far as proceeding
forward accordingly.
Really breaking down theinformation that we discussed
(33:36):
because I don't expect myclients in such a nuanced
industry, especially who are notlicensed healthcare
professionals, to take it all inand digest it.
And so to have this informationat their fingertips to review
and digest in the many nightsthat I'm sure that they did from
our meeting is just vital inthis space.
(33:57):
There's so much room formiscommunication and
misinformation andmisunderstanding.
And so I, to this day, believeit's vital in this space so that
everything's clear and folks canfall back upon it to put
everything in writing to ourclients when there are so many
nuances involved.
And so in that two-week period,as Stephen, you went through,
(34:18):
and you'll talk about later, I'msure, dozens and dozens of email
correspondence.
SPEAKER_02 (34:24):
Yeah, and I think that's what's, and that is, I
think, one thing that was veryimpressive about what Michael's
interactions with owner one andowner two.
It was multiple conversationsand multiple writings.
There were emails, there werememos, there was more emails.
It was a back and forth process.
So, and I think, Michael, Ithink the big thing was, I mean,
in your interaction, I mean,when you sent your memo to them
(34:46):
about kind of going through, didyou just automatically assume
that they fully understood everysingle thing you sent them just
because you sent it in a memoone day?
SPEAKER_01 (34:53):
No, this is a review, digest, and let's set a
call to discuss it and make surethat we understand it.
SPEAKER_02 (35:00):
Yeah.
And I think that's reallyimportant because ultimately,
this is really confusing stuff.
It's really confusing stuff.
I think it's confusing forlawyers, to be honest.
And if it's confusing forlawyers, it's really confusing
for clients out there who aretrying to navigate things,
especially lawyers.
if they're getting conflictingadvice from other people.
And I think Noel and Michaelboth refer to this, but owner
(35:22):
one and owner two, as they'retalking to Noel and Michael,
they were hearing from...
the biller they had that Noelleand Michael didn't know what
they were talking about.
Forget about it.
So, and that was one of theissues that I think Noelle and
Michael were trying to deal withbecause they were trying to talk
to owner one and owner two.
And basically while someone elsewas telling them to disregard
(35:43):
everything they were saying.
So, Michael, I mean, ultimately,so how did you get through?
I mean, what did it take to getreally, to get through to them
and kind of help them understandwhere you were coming from?
SPEAKER_01 (35:54):
I think Knoll played a great big part of that as
well, because as they went totheir billing company or biller
and expressed disbelief ordistrust or not necessarily
fully understanding what I wassaying, they went to Knoll with
the same.
And it took really diving intothe LCDs from a legal and a
(36:15):
biller perspective for them tosee that not only may there be
some ambiguity there, but theymay be falling on the wrong side
of gray with respect to thestate of the industry and what
was going on.
So I think at the end of theday, given that we were coming
out of Operation Brace Yourself,and although, of course, their
actions didn't come close tomirroring what the folks did
(36:38):
that got caught up in thoseinitial arrests and indictments,
they saw at the end of the daythat it wasn't worth building a
business around something thatcould have that ambiguity or
worse.
From my understanding.
SPEAKER_03 (36:50):
Yeah, and Steven, you touched on this as well.
You know, posts, brace yourself.
there was some guidance thatcame out from the government.
I think that also helped in ourendeavors, because subsequent to
that, Medicare came out withsome guidance that was on the
side of what Michael and I havebeen saying over the last couple
(37:10):
of weeks.
So the timing, I guess, wasperfect, and they actually saw
that what we said was great.
And Michael touched on thisearlier, but not all billing
companies are created equal,right?
And it's really just thereality.
And we just have to make surethat we're adherent to the
rules.
(37:31):
Where there is gray areas, weerr on the side of caution
because, you know, one of my lawprofessors put it this way, the
healthcare space is like aminefield with tripwires in
every direction you step.
And that's the reality.
So, you know, if in doubt, it'sbest for you to proceed with
caution and get good advice.
People who don't have stake inthe game or people who are gonna
(37:54):
give you the advice, regardlessif it benefits them directly or
indirectly or not.
They're gonna give you the rightadvice.
I
SPEAKER_01 (38:01):
would add a blindfold to running around in
that minefield with respect tothat analogy, and it's
wonderful, Noel.
SPEAKER_02 (38:08):
As a result of all their conversations with Noel
and Michael, owner one and ownertwo decide to shut down their
business entirely.
They still thought they had beendoing the right thing and doing
things correctly.
And they were still hearing fromtheir biller that Noelle and
Michael didn't know what theywere talking about.
But they understood Michael'sconcerns, even if they didn't
fully understand everythingMichael was saying.
(38:30):
And they decided they wanted toshut down the business.
They wanted to do the rightthing, and they understood the
advice about the risks.
So they shut this all down.
And then...
But unfortunately, that wasn'tquite the end of the story.
But before we get to that,Noelle, Michael, just any
thoughts for our audience abouthow to convey all this stuff to
(38:53):
clients?
These are difficult concepts.
Any advice you have to givepeople in trying to explain
these concepts to them?
Michael, why don't we start withyou?
UNKNOWN (39:03):
Sure.
SPEAKER_01 (39:03):
I think a major takeaway for attorneys or other
advisors that may be watchingthis, in advising individuals
and clients in such a complexspace, make sure that the
message is heard and is conveyedand is understood as much as
possible.
Even if your clients may notagree with the message that is
(39:24):
being heard or conveyed, makesure that they understand it.
We're dealing with very, verycomplex issues and regulations,
a law with 50 Jamal?
SPEAKER_03 (39:51):
Yeah, and I'll say is from the provider
perspective, always try to seek,not all builders are created
equal, not all consultants arecreated equal.
Maybe it's helpful to probablyget the opinion of multiple and
compare them all to see whatmakes sense, right?
And just make sure that theadvice you're getting, there's
(40:13):
no other ulterior motives orother incentives tied to that
that would influence thedecision that you get.
Billing can be very complex.
I've been asked as a subjectmatter expert to be involved
with a lot of cases that havevery nuanced policies and
nuanced billing requirementsthat probably is not common
(40:37):
sense to the average person,right?
So I say, just make sure thatyou get proper guidance from an
appropriate individual with theexperience and with the
integrity and who putscompliance at the forefront.
And for consultants, make sureyou document everything, every
conversation that you have withanyone that have always have it
(41:00):
memorialized in an email or amemo, just so that it's clear
what the position is becausesometimes you may have a
conversation and what someonetook away from it may not
necessarily mean what you meantto communicate but having a
follow-up email thatmemorializes the conversation
gives them a second opportunityto say well okay this is not
(41:23):
what i actually understood fromour conversation can you clarify
and then allow for as muchdialogue as possible until they
actually get it.
But those are just really someof the takeaways that I would
definitely encourage bothproviders and consultants who
are involved in this verycomplex minefield of called
healthcare compliance.
SPEAKER_02 (41:46):
As I said, unfortunately, talking to Noelle
and Michael was not the end ofthe story.
So unbeknownst to owner one andowner two, the federal bureau
investigation had already openedan investigation into owner one
and owner two's business,actually even months before they
(42:07):
even met Noel and Michael.
And even though they shut downthe business, the FBI continued
their investigation.
And two years after owner oneand owner two talked to Noel and
Michael, they were charged infederal court with healthcare
fraud crimes and violations ofthe anti-kickback statute, all
relating to the DME businesses.
(42:30):
And that's where I and anotherlawyer, Jonathan Meltz, came
into the story.
And that's what we're going tocover in part two of this
podcast.
So I want to thank Noel andMichael for everything they did
on behalf of owner one and ownertwo, which we will come back to
in part two.
And we will, I hope you comeback and hear the rest of the
(42:52):
story.
And thanks again, everyone.
SPEAKER_00 (43:01):
To subscribe and add this private podcast feed to
(43:26):
your podcast app, go toAmericanHealthLaw.org slash
Daily Podcast.
you
Popular Podcasts
Bookmarked by Reese's Book Club
Welcome to Bookmarked by Reese’s Book Club — the podcast where great stories, bold women, and irresistible conversations collide! Hosted by award-winning journalist Danielle Robay, each week new episodes balance thoughtful literary insight with the fervor of buzzy book trends, pop culture and more. Bookmarked brings together celebrities, tastemakers, influencers and authors from Reese's Book Club and beyond to share stories that transcend the page. Pull up a chair. You’re not just listening — you’re part of the conversation.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com