WAUKESHA, Wisconsin—Kinex Medical Company, LLC, agreed to pay $6,925,000 to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare, TRICARE and other federal programs.
Based in Waukesha, Wisconsin, Kinex sells and distributes durable medical equipment, including knee, shoulder and hip braces, to patients across the U.S. After receiving information from a whistleblower, the United States investigated and alleged that the company submitted false claims to Medicare, TRICARE, the Federal Employees Health Benefits Program (FEHBP) and the Office of Workers Compensation Programs of the Department of Labor (OWCP).
Specifically, the United States alleged that from 2019 through 2024, Kinex provided patients covered by these programs with medical braces that the patients did not need and then billed Medicare, TRICARE, FEHBP and OWCP as if the braces had been necessary. The United States also alleged that Kinex convinced the patients to accept the braces by waiving costs like patient co-pays and by giving the patients other equipment for free.
In addition to paying nearly $7 million to resolve the allegations concerning these false claims, Kinex also entered into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General (HHS-OIG), to ensure compliance with applicable regulations going forward.
“Medicare, TRICARE and other federal programs only pay for medical equipment that patients actually need,” said United States Attorney Schimel. “Kinex, however, induced patients to receive braces that neither the patients nor their doctors thought they needed, all in an effort to receive taxpayer money. This settlement imposes a significant penalty on Kinex and will make taxpayers whole for the company’s wrongdoing.”
Because the government’s investigation resulted from a whistleblower complaint filed under the qui tam provisions of the False Claims Act, the whistleblower will receive a share of the settlement.