DME suppliers, clinical laboratories, diagnostic-testing providers, marketers, ordering clinicians, and owners may face allegations involving unnecessary equipment or tests, phantom services, repeat testing, upcoding, unbundling, false orders, beneficiary identity misuse, telemarketing, kickbacks, or claims to Medicare, Medi-Cal, and private payers.
A medical-necessity, documentation, coverage, coding, or supplier-standard dispute is not automatically fraud. The government must prove the conduct and mental state required by the selected law. Our California healthcare fraud guide explains the broader framework; this page focuses on equipment, laboratory, and diagnostic-testing matters.
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Do not alter an order, recreate a physician encounter, relabel a specimen, change a code without preserving history, delete calls or messages, merge accounts, or contact beneficiaries to align recollections. Counsel can preserve native evidence while maintaining lawful patient and supplier operations.
Our healthcare investigation and subpoena defense guide addresses early response to interviews, demands, subpoenas, and warrants.
Investigators may allege that braces, glucose supplies, catheters, respiratory equipment, genetic tests, toxicology panels, cardiac studies, imaging, or other items were not reasonable and necessary for the beneficiary. Necessity depends on the item or test, diagnosis, symptoms, treating record, coverage source, order, date, and applicable policy. A later reviewer’s disagreement does not by itself prove a knowingly false claim.
Claims may be challenged as never delivered or performed, duplicated, repeated without justification, billed at a higher level, or separated from a required bundle. The defense should reconcile orders, inventory, shipping, proof of delivery, specimen logs, analyzer data, results, communications, coding rules, and remittances rather than treating a claim line as self-proving.
Authorities may allege prepopulated orders, signatures without review, fictitious encounters, stolen Medicare identifiers, deceased beneficiaries, swapped specimens, or inaccurate diagnoses. Each record should be traced to its author, source, access path, clinical support, transmission, and use. See our false medical records and certifications guide.
Marketing fees, leads, call centers, telemedicine, percentage compensation, and payments for orders may trigger anti-kickback scrutiny. A contract is neither automatically lawful nor automatically criminal. The program, remuneration, referrals, actual services, compensation method, safe harbors, and intent matter. See our kickback and referral defense guide.
42 C.F.R. section 424.57 contains Medicare DMEPOS supplier standards addressing licensure, enrollment information, physical location, insurance, delivery, complaints, records, accreditation, and other requirements. Subsection (c)(11) limits telephone contact with a beneficiary unless written permission, coordination for an item already furnished, or a qualifying prior-supplier relationship applies.
A supplier-standard violation can affect enrollment or billing privileges without automatically proving healthcare fraud. The exact contact, permission, item, prior relationship, caller, vendor, claim, and accused person’s knowledge should be established. A third-party marketer’s conduct should not be imputed without evidence of authority, knowledge, direction, or participation.
Current CMS DMEPOS documentation guidance states that Medicare claims generally require a standard written order communicated before claim submission, plus medical-record support, correct coding, and proof of delivery. Some items require a written order before delivery. A missing or deficient document may support denial or recoupment while criminal liability still requires the charged mental state.
42 U.S.C. section 263a requires an applicable federal certificate for clinical laboratory examinations and authorizes standards for personnel, quality assurance, quality control, proficiency testing, records, specimen handling, and reliable results. CLIA compliance, test validity, billing coverage, and fraud are related but distinct questions.
California Laboratory Field Services registers waived and provider-performed microscopy sites and licenses moderate- and high-complexity laboratories. Its CLIA page coordinates federal certificates with California licensing, and its complaints program investigates state-regulated laboratory issues and may collaborate with other agencies. Personnel and facility requirements depend on test complexity and role.
A licensing lapse, proficiency issue, specimen error, result correction, or personnel violation can create regulatory exposure without proving that a claim was intentionally false. The defense should separate analytical validity, clinical validity, medical necessity, ordering, performance, reporting, and billing.
Penal Code section 550 applies only when DME, testing, or claim facts fit one of its separate insurance-fraud offenses and the required knowledge or intent. A denied test, unsupported code, delivery dispute, or correction is not automatically a knowingly false healthcare-benefit claim. Our medical billing fraud guide addresses claim mechanics.
Welfare and Institutions Code section 14107 addresses specified false Medi-Cal claims, knowingly false information, and schemes to defraud Medi-Cal or another DHCS program. Section 14107.2 separately addresses remuneration connected to Medi-Cal referrals, purchasing, leasing, or ordering. Program and referral theories must not be collapsed.
18 U.S.C. section 1347 addresses knowingly and willfully executing or attempting a healthcare-fraud scheme. Section 1035 addresses specified knowingly and willfully made materially false statements or writings in healthcare-benefit matters. Personal participation, scheme, falsity, materiality where required, and intent must be proved.
The federal False Claims Act is separate civil exposure with its own knowledge, falsity, materiality, causation, procedure, damages, and penalties. Medicare and Medi-Cal issues are discussed further in our program-fraud guide.
42 U.S.C. section 1320a-7b(b) addresses knowingly and willfully soliciting, receiving, offering, or paying remuneration connected to referrals, purchases, leases, orders, or recommendations for federally reimbursable items or services, subject to statutory exceptions and regulatory safe harbors. It is a criminal statute.
42 U.S.C. section 1395nn, commonly called the Stark Law, is a separate civil Medicare referral and billing framework. When a physician or immediate family member has a financial relationship with an entity, referrals and claims for designated health services may be prohibited unless an exception applies. Clinical laboratory services and specified imaging are designated health services; DME may be relevant within statutory definitions. Stark should not be described as a generic criminal kickback law.
A January 2026 DOJ release reports a guilty plea by a laboratory owner in a genetic-testing case involving purchased orders, telemarketing, allegedly unnecessary tests, and kickbacks. A plea is case-specific. A 2025 national enforcement release describes charges involving telemedicine, DME, genetic testing, diagnostic testing, and allegedly unnecessary or unprovided services. Charges are allegations unless proved.
Enforcement may involve DOJ, FBI, HHS-OIG, CMS, contractors, DHCS Investigations, California DOJ DMFEA, CDPH LFS, professional boards, and private payers. Criminal charges, FCA claims, overpayments, extrapolation, payment suspension, revocation, exclusion, CLIA or state discipline, credentialing, and professional licensing have different standards and deadlines.
Federal proceedings may require a federal defense strategy. Ordering clinicians and licensees may need coordinated professional criminal and licensing defense.
No defense applies automatically. A refund, repayment, disclosure, self-report, contract change, beneficiary contact, interview, or cooperation decision may affect several proceedings and should be evaluated before action. No criminal, civil, payer, licensing, or enrollment result can be promised.
No. It may support denial or overpayment, but fraud requires proof of the selected statute’s elements and mental state. Clinical facts, the order, treating relationship, coverage policy, and accused person’s role matter.
Section 424.57(c)(11) permits specified calls, including with written permission, to coordinate delivery of an item already furnished, or in a qualifying prior-supplier relationship. The actual contact and exception must be verified.
No. It can defeat coverage or payment. Criminal liability requires evidence of knowing or willful false conduct under the selected law, not merely a deficient file.
No. Certificate type, testing complexity, specialties, personnel, and state rules matter. California also has facility and personnel licensing requirements administered by LFS.
No. The Anti-Kickback Statute is a criminal remuneration law requiring knowing and willful conduct. Stark is a separate civil Medicare designated-health-service referral and billing framework with defined financial relationships and exceptions.
Only if the applicable law and evidence establish their own participation, knowledge, causation, agreement, or other required elements. Title, ownership, or vendor status alone does not prove every act.
Preserve the request and native evidence, stop inappropriate deletion, do not alter orders or contact witnesses to align stories, determine the deadline and authority, and obtain advice about a coordinated response.
This page provides general information, not legal advice. Reading it, calling the firm, or submitting information does not by itself create an attorney-client relationship. Laws and procedures can change, and every matter depends on its facts, evidence, jurisdiction, and timing. Past results do not guarantee a future outcome.
Call 888-702-8882 to discuss a DME, laboratory, diagnostic-testing, or referral investigation with My Rights Law.
This page was written by the My Rights Law Editorial Team and reviewed for legal accuracy by Bobby Shamuilian.
Attorney Shamuilian is the founder and managing partner of My Rights Law and is widely recognized as a legal authority, frequently appearing as a legal analyst and TV pundit on national news outlets.
He has earned a perfect “10.0 – Top Attorney” rating on AVVO and a “10.0” rating on Justia, and has been named among the “Top 40 Under 40” and the “Top 100 Trial Lawyers” by The National Trial Lawyers.
With his proven expertise and dedication, Mr. Shamuilian is committed to protecting your rights and achieving the best possible outcome for your case.
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