Kinex Medical Company Agrees to $6.9 Million Settlement for Fraudulent Claims
Brad D. Schimel, the United States Attorney for the Eastern District of Wisconsin, announced that Kinex Medical Company, LLC, headquartered in Waukesha, Wisconsin, has agreed to pay $6,925,000 to settle allegations of submitting false claims under the False Claims Act. The accusations involved fraudulent billings submitted to Medicare, TRICARE, and other federal healthcare programs.
Kinex, a provider of durable medical equipment like braces, was alleged to have billed federal programs for unnecessary medical devices distributed to patients. The allegations also suggest that the company persuaded patients to accept these devices by waiving co-pays and offering additional equipment free of charge. These actions reportedly took place from 2019 to 2024 and included programs such as FEHBP and OWCP.
The settlement includes Kinex entering a Corporate Integrity Agreement with the U.S. Department of Health and Human Services' Office of the Inspector General to ensure compliance with healthcare regulations moving forward.
Special Agent Mario M. Pinto from HHS-OIG emphasized the importance of safeguarding federal healthcare programs: "Billing taxpayers for medically unnecessary equipment can erode trust in our healthcare system. This settlement reinforces our commitment to protecting these programs and the patients they serve."
Ensuring Accountability
FBI Special Agent in Charge Alan Karr noted, "The agreement by Kinex to repay over $6.9 million highlights the breadth of their fraudulent activity. We will continue to pursue those engaged in healthcare fraud schemes."
Jason J. Sargenski, Special Agent-in-Charge with the Department of Defense's DCIS, stressed the impact on military health benefits: "Fraud that diverts resources from TRICARE undermines the care promised to service members and their families. DCIS remains committed to accountability and deterrence."
Additionally, Derek M. Holt from OPM-OIG remarked, "Patients expect necessary medical equipment for their recovery, not for companies' profit. We commend our agents and partners for holding Kinex accountable."
The government's intervention stemmed from a whistleblower complaint under the False Claims Act's qui tam provisions, with the whistleblower eligible for a share in the settlement. The ongoing lawsuit is titled United States ex rel. Geboy v. Kinex Medical Company, LLC, Case No. 24-cv-1461, in the Eastern District of Wisconsin.
The settlement was managed by Assistant U.S. Attorneys Nia Schmaltz and Michael Carter, with investigatory support from HHS-OIG, FBI, OPM-OIG, DCIS, and USPS-OIG. Kinex denies admitting liability under the terms of the settlement.