Sleep clinic faces whistelblower lawsuit

The U.S. government has joined a whistleblower lawsuit that alleges the owners of a chain of 16 Bay Area sleep clinics fraudulently billed Medicare for sleep tests.

The government participation was disclosed in an unsealing order issued Monday by U.S. Magistrate Paul Grewal of San Jose. The order followed a May 7 filing in which U.S. Attorney Melinda Haag informed the court that the government would join the false claims lawsuit filed in federal court in San Jose by a former clinic employee in 2012.

The lawsuit was filed against Saratoga residents Anooshiravan Mostowfipour, 57, and Tara Nader, 56, who own and operate the 16-location Bay Sleep Clinic.

It also names Mostowfipour’s and Nader’s two businesses, Qualium Corp., the corporate parent of Bay Sleep Clinic, and Amerimed Corp., which sells medical equipment, as defendants.

The suit alleges the owners and their companies violated the U.S.

False Claims Act by fraudulently billing Medicare for sleep tests that were conducted at unapproved locations and/or performed by technicians who lacked the required licenses or certifications.

The tests are intended to diagnose disorders such as sleep apnea.

The lawsuit also alleges the owners fraudulently billed Medicare for corrective medical equipment in violation of rules that prohibit sleep test providers from supplying medical devices or sharing a sleep laboratory location with a medical equipment supplier.

The False Claims Act allows private citizens, sometimes known as whistleblowers, to file lawsuits on behalf of the U.S. government.

After such a lawsuit is filed, it remains sealed while federal agencies investigate and decide whether the government should join the case.

The government decides to intervene in, or join, only about 25 percent of such cases, according to the Justice Department. If the government chooses not to participate, the whistleblower can then continue the case on his or her own.

In the May 7 filing, Haag notified the court that the government would join the case and asked to have some documents, including the original lawsuit, unsealed. Haag also said federal lawyers will file a separate but related lawsuit on behalf of the government by Sept. 4.

Grewal then ordered the unsealing of part of the case on Monday and scheduled a case management hearing for Oct. 6.

The person who filed the lawsuit in 2012 is Elma Dresser, described as a former employee who began learning in 2010 of “facts tending to indicate that billings did not comply with regulations.” Under the law, if the litigation is successful, the government can recover a financial award of triple the amount of damages plus $5,500 to $11,000 for each false or fraudulent claim filed, and the whistleblower can receive 15 to 25 percent of the recovered amount.

A spokesperson for Bay Sleep Clinic could not be reached for comment.