LOS ANGELES – A Canoga Park-based company that sells home medical equipment has paid $565,873 to resolve allegations that it knowingly submitted false claims to federal health care programs for medically unnecessary medical supplies and supplies never delivered to patients.
Valley Home Medical Supply, Inc., which provides medical supplies and durable medical equipment, paid the settlement on Tuesday as part of an agreement that resolves a “whistleblower” lawsuit that alleged the company defrauded the Medicare and TRICARE programs from July 2006 until May 2013. With the payment of the settlement, United States District Judge Dale S. Fischer today dismissed the lawsuit.
Valley Home Medical Supply’s former president and chief executive officer, Kenneth Greenlinger, 75, of Oxnard, pleaded guilty in May 2017 to two counts of health care fraud and served an eight-month federal prison sentence. In the criminal case, Greenlinger was ordered to pay restitution of $1,072,618.
Kari Kitamura, a former employee of Valley Home Medical Supply, filed the civil lawsuit, United States ex rel. Kitamura v. Valley Home Medical Supply, CV12-11036 DSF(AGRx), in 2012 in United States District Court in Los Angeles. The United States elected to intervene in the lawsuit in 2017.
Ms. Kitamura filed the lawsuit under the qui tam – or whistleblower – provisions of the False Claims Act, which permit private parties to sue on behalf of the United States and to receive a share of any recovery. As a result of the settlement, Ms. Kitamura will receive $124,492, which equals 22 percent of the settlement proceeds. Valley Home Medical Supply will also pay Ms. Kitamura $80,000 for attorney’s fees.
This case was handled by Assistant United States Attorney Lisa A. Palombo of the Civil Fraud Section, who worked closely with the Federal Bureau of Investigation and the U.S. Department of Health and Human Services – Office of Inspector General.