A Colorado-based medical device company just admitted, in writing, to running an elaborate health care fraud scheme that investigators say led to hundreds of millions of dollars in overbilling of patients and insurers. The Denver Post’s Sam Tabachnik reports that Englewood-based Zynex Inc. entered into an agreement with the U.S. Department of Justice to avoid prosecution, and agreed to pay between $5 million and $12.5 million in penalties (the final number depends on earnings during the settlement period) and to forfeit “millions” in unpaid claims.
The article says the DOJ announcement comes a month after a federal grand jury indicted two former top Zynex executives who allegedly spearheaded the years-long scheme. And the admissions are not subtle. Investigators said the company collected more than $873 million for its products, including more than $600 million for supplies, “the vast majority” of which they say resulted from fraud. Zynex also acknowledged that it shipped and billed for medically unnecessary supplies in excess quantities and misled investors who were unaware of the fraudulent billing practices.
The Bullet Point Brief
- Zynex admits to participating in a conspiracy involving health care fraud and other violations, then signs a deal with DOJ to avoid prosecution. This is the part where taxpayers are told to call it “resolution.”
- The penalties are $5 million to $12.5 million, depending on earnings. Funny how the punishment has a payment plan vibe when regular people miss a tax payment by accident.
- Investigators say the company pulled in $873 million total, including $600 million for supplies, with “the vast majority” tied to fraud. That is not a paperwork mistake. That is a business model.
- Zynex acknowledged shipping and billing medically unnecessary supplies in excess quantities, and misleading investors about the billing practices. This is not “creative accounting.” This is stealing with a barcode scanner.
- Two former top executives were indicted last month, and the company says it has “new management” and will implement enhanced compliance and corporate governance reforms. Because nothing cleanses fraud like a fresh PowerPoint on compliance.
My Bottom Line
Someone needs to go to jail. Or multiple someones. I just wrote comments on an article that speaks of how much the Medicaid line in the state budget is expanding – and then I read this crap?!
Read this and tell me it does not make your blood boil. We are sitting here watching Medicaid eat the state budget alive, lawmakers whining about “revenue” and eyeing your wallet, and then you turn the page and see a company admit to a scheme that overbilled patients and insurers by hundreds of millions. That is not a victimless crime. That is a direct hit on premiums, taxes, and the cost of health care for everybody.
And what do we get? A deal to “avoid prosecution,” a penalty range that might as well be a rounding error next to the amount investigators say was tied to fraud, and the usual soothing language about “enhanced compliance” and “new management.” The American taxpayer gets dry humped, and the system responds with settlements, agreements, lawyers, and fees.
This is why I roll my eyes so hard at politicians who promise the government should run more health care, or that “single payer” is going to save us. Stop. Just stop. If the system cannot punish obvious fraud quickly and severely, giving it more money and more power does not fix the problem. It supercharges it.
Accountability is the missing ingredient. Real consequences. Real prosecutions. Real prison time for the people who knowingly built the fraud machine. Until that happens, the incentives are upside down: the reward is enormous, and the risk is manageable. And then we all wonder why budgets explode and families cannot afford basic coverage.
Source: The Denver Post
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