Eastern KY medical equipment company to pay $5.25 million for fraudulent claims

LEXINGTON, Ky. (WTVQ) – A Eastern Kentucky medical equipment supplier will have to pay more than $5 million for making false claims about the ingredients used in its medical creams.

The United States Attorney’s Office for the Eastern District of Kentucky says Cooley Medical Equipment, Inc., headquartered in Prestonsburg, agreed to pay $5,254,912 to resolve the claims against it.

Cooley previously operated a pharmacy in Prestonsburg that, in 2015, began making compounded medical creams.

Compounding pharmacies, like Cooley’s, prepare customized medications for individual patients, usually by mixing ingredients in order to create a prescription cream.

According to the U.S. Attorney’s Office, Cooley billed these prescriptions to government insurers, but because Medicare, through its Part D program, does not cover bulk powder ingredients, Cooley misrepresented the nature of some of ingredients in its medical creams in its claims to federal insurers.

This practice led to the submission of thousands of false claims by Cooley between January 2015 and December 2016, and millions of dollars in improper reimbursements, according to the U.S. Attorney’s Office.

Authorities say Cooley did voluntarily self-disclose the misconduct to the U.S. Attorney’s Office, took proactive steps to resolve the problem, and no longer operates a compounding pharmacy.

Categories: News, State News

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