Hanger office in N.Y. is accused of fraud

A billing supervisor in the West Hempstead, N.Y., office of a Maryland-based medical supply company has accused the firm of Medicare and other types of fraud that could total as much as $1 million.

The company, Hanger Orthopedic Group Inc. of Bethesda, said it is conducting a "prompt and thorough" investigation of the allegations, which are being looked into by the U.S. attorney's office in Brooklyn and the New York attorney general's office.


The employee, Kendall McDaniel of Hempstead, has alleged that a clinician at Hanger's West Hempstead facility was writing doctors' signatures on prescription forms and that Medicare and other payers were billed for services to nonexistent patients. Hanger operates 608 patient-care centers, including the one in West Hempstead, in 44 states.

Ken Mollins of Melville, N.Y., McDaniel's attorney, said yesterday that the fraudulent claims could total as much as $1 million.


Mollins said he took McDaniel to the studios of WNBC-TV in Manhattan last week, where she made her allegations public for the first time. McDaniel had previously made the allegations to Hanger's "Compliance Hot Line," Mollins said, but nothing occurred as a result.

After her complaints became public, McDaniel, 26, was placed on paid administrative leave.

Hanger said last week that it had received a subpoena June 17 from the U.S. attorney's office in Brooklyn requesting documents "relating to these allegations" and seeking information concerning 14 of the company's patient-care centers in downstate New York.

Ivan R. Sabel, Hanger's chairman and chief executive, said in a statement that company auditors are conducting "a thorough investigation" of the West Hempstead facility.

"We take this matter very seriously," Sabel said. "We are expending all the necessary resources to bring this matter to an accurate and swift conclusion."

Hanger also said the Securities and Exchange Commission has requested information from the company regarding the allegations.

Spokesmen for the U.S. attorney's office and the SEC declined to comment yesterday.

Kevin Ryan, a spokesman for the New York state attorney general's Medicare fraud-control unit said that it had received a letter from Mollins. Ryan declined to comment further. However, a source close to the unit said investigators from the state attorney general's office plan to interview McDaniel.


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