PHILADELPHIA, PA — United States Attorney Jacqueline C. Romero announced a significant settlement this week involving Electrostim Medical Services, Inc. (EMSI), a Florida-based supplier of durable medical equipment, and its Founder and Chairman, Mario Garcia, Jr. The parties have agreed to a $20 million settlement to resolve allegations of violating the False Claims Act. These serious allegations pertain to the billing of federal healthcare programs for excessive and medically unnecessary supplies associated with Transcutaneous Electrical Nerve Stimulation (TENS) and related devices.
TENS units, which are designed to provide temporary pain relief by delivering low-voltage electrical currents through electrodes placed on the skin, are integral for many patients managing chronic pain. However, the U.S. government alleged that from 2018 through 2019, EMSI and Garcia exploited the reimbursement structures of certain federal healthcare programs, notably TRICARE. The company reportedly submitted claims for unbundled supply codes, billing for unnecessary replacement supplies during the initial month of use, and continued to bill for traditional electrodes alongside wearable garments that served the same purpose.
According to the allegations, EMSI’s practices resulted in false claims, causing TRICARE beneficiaries to incur unnecessary copayment expenses. The government’s assertions indicate that EMSI knowingly pursued these billing strategies without regard to medical necessity.
Commenting on the case, U.S. Attorney Romero emphasized the importance of integrity within the medical supply industry, particularly when serving military members and their families. She remarked, “EMSI and Garcia served their own financial interests over and above the medical needs of patients. This conduct will not be tolerated by my office. We will work tirelessly to hold businesses like this to account.”
Echoing these sentiments, Acting Special Agent in Charge Brian J. Solecki of the Defense Criminal Investigative Service (DCIS) highlighted the burden that fraudulent activities impose on the TRICARE program, underscoring the commitment to safeguarding its integrity.
In a released statement, EMSI decalred “EMSI has fully cooperated with that inquiry, even as we maintained that our billing practices were accurate, appropriate, and consistent with known guidance. However, in order to put this time-consuming and costly matter involving conduct in 2018-2019 behind it, EMSI has reached an amicable resolution with the Department of Justice that will terminate the government’s inquiry while continuing to deny all of the government’s allegations.”
Mario Garcia, Jr., EMSI Chairman and Founder, said, “Today’s resolution puts an end to a difficult and time-consuming distraction for our company. We are grateful in putting this challenge behind us, vigorously deny any wrongdoing and look to the future of what EMSI stands for: Providing world class durable medical equipment that makes a difference in society by improving the quality of life, one patient at a time.”
The resolution of this case follows a comprehensive investigation conducted by multiple federal agencies, including the DCIS, the Department of Labor Office of Inspector General, the Office of Personnel Management, the United States Postal Service, and the Department of Veterans Affairs. Assistant United States Attorneys Charlene Keller Fullmer and Bryan C. Hughes, along with former Assistant United States Attorney John T. Crutchlow, led the civil investigation and settlement efforts, supported by Auditor George Niedzwicki.
It is important to note that the claims resolved by this settlement are allegations only, and there has been no determination of liability. This settlement reflects the concerted efforts of federal agencies to address fraudulent billing practices and ensure accountability within the healthcare system.
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