United States Sues Qualium Corporation And Bay Area Sleep Clinics To Recover Damages Under The False Claims Act

SAN JOSE – The United States has filed a False Claims Act complaint against the owners and operators of Bay Sleep Clinic and their related businesses, Qualium Corporation, CPAP Specialist, and Amerimed Corporation, announced Acting United States Attorney Brian J. Stretch and U.S. Department of Health and Human Services Acting Special Agent in Charge Gerald Roy.

The government’s complaint alleges that Saratoga, Calif., residents Anooshiravan Mostowfipour, 57, and Tahereh Nader, 56, and their companies fraudulently billed the Medicare program for diagnostic sleep tests.  Defendants Mostowfipour and Nader own Qualium Corporation, which operates fourteen sleep clinics doing business as Bay Sleep Clinic.  The defendants also own Amerimed Corporation, which distributes durable medical equipment under the names Amerimed Sleep Diagnostics and Amerimed CPAP Specialists.  The defendants are alleged to have submitted over 14,000 false claims to Medicare for diagnostic sleep studies and durable medical equipment.

The United States’ complaint was filed in a whistleblower action, captioned United States ex rel. Dresser v. Qualium Corp., et al., Civil Action No. 12-1745 (N.D. Cal.), that was filed under the qui tam provisions of the False Claims Act.  The False Claims Act allows for private persons, such as Elma F. Dresser in this case, to file actions to provide the government information about wrongdoing.  The United States is entitled to intervene, as it did here in May 2015, and take over such lawsuits.  By filing its complaint in intervention today, the government provides the allegations that will establish the parameters of its claims.  In this case, the government alleges defendants billed Medicare for tests that were conducted at unapproved locations and performed by technicians lacking the licenses or certifications required by Medicare payment rules and regulations.  Specifically, the government alleges that defendants obtained approval to treat Medicare patients at only two of their locations and then treated patients at all their Bay Sleep Clinic locations.  Defendants then falsified documents to state that the patients had been treated at one of the two approved locations.  The government also alleges that the defendants fraudulently billed Medicare for medical devices in violation of Medicare rules, and regulations that prohibit providers of diagnostic sleep tests from supplying medical devices and from sharing a sleep laboratory location with a durable medical equipment supplier.

Under the False Claims Act statute, if it is established that a person has submitted or caused others to submit false or fraudulent claims to the United States, the government can recover treble damages and $5,500 to $11,000 for each false or fraudulent claim filed.  If the government is successful in resolving or litigating its claims, the whistleblower who initiated the action can receive a share of between 15 percent to 25 percent of the amount recovered.

The whistleblower action in this case contained additional allegations.  However, the United States is intervening only with regard to certain allegations, i.e., that Qualium Corporation (doing business as Bay Sleep Clinic), Amerimed Corporation (doing business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialists), Nader, and Mostowfipour submitted false claims to Medicare for durable medical equipment and for sleep tests performed at unapproved locations or by unqualified technicians.  The United States is not pursuing the whistleblower’s additional claims against the third-party company used by the defendants to submit claims to Medicare nor claims regarding alleged improper payments made by the defendants to medical providers.

Assistant U.S. Attorneys Kimberly Friday and Robin M. Wall are handling the case with assistance from Financial Fraud Investigator Michael Zehr.  The investigation was conducted by the U.S. Attorney’s Office for the Northern District of California and the Office of Inspector General of the Department of Health and Human Services.

The claims asserted in the complaint are allegations only, and there has been no determination of liability.