Colorado medical device company confesses to involvement in fraud scheme

A medical device company based in Colorado recently confessed to being involved in a conspiracy to commit various types of fraud, as reported by the U.S. Attorney’s Office for the District of Rhode Island. The company, Zynex, entered into a non-prosecution agreement where it acknowledged wrongfully obtaining millions of dollars from government entities, private health care providers, and patients by submitting excessive or improper claims for medical devices and supplies.

The Statement of Facts included in the agreement revealed that Zynex admitted to deceitfully acquiring over $873 million for its products, with more than $600 million attributed to supplies that were predominantly the result of fraudulent activities. The company also engaged in shipping and billing for medically unnecessary supplies in quantities exceeding what was required, at times sending as many as 32, 64, or even 128 electrode pairs per patient monthly. Zynex further misled investors by concealing the fact that its revenues stemmed from fraudulent billing practices.

Amanda Koldjeski, Acting Special Agent in Charge of FBI Denver, emphasized the FBI’s dedication to uncovering and preventing healthcare fraud, which costs patients, insurers, and the government billions of dollars annually. To uphold the integrity of the healthcare system, the FBI remains committed to holding individuals or entities involved in healthcare fraud accountable for their actions.

Zynex has agreed to pay a sum ranging between $5 million and $12.5 million, contingent on the company’s earnings and profits during the agreement period. Additionally, the company has committed to fully collaborating with ongoing government investigations and implementing compliance measures and corporate governance reforms to prevent future misconduct, enhance internal oversight, and ensure accountability under new leadership.

In summary, the medical device company Zynex has acknowledged its participation in fraudulent activities aimed at siphoning millions of dollars from government and private health care entities and patients. By entering into a non-prosecution agreement and agreeing to pay a substantial sum, as well as cooperate with investigations and implement reforms, Zynex aims to rectify its wrongdoings and prevent similar misconduct in the future.