Crown Medical Solutions and its owners, Michelle and Philanzo King, have agreed to pay $825,000 to resolve allegations under the False Claims Act that they submitted false Medicare claims for durable medical equipment between November 1, 2017 and April 30, 2019. Crown Medical supplied durable medical equipment including knee braces, heel stabilisers and back braces.
The settlement stems from a broader investigation tied to the Access DX $36.4 million False Claims Act case, which targeted improper billing practices in durable medical equipment. The US Department of Justice alleged that the company and its owners billed DOJ Charges 455 People Over $6.5B Health Fraud for equipment provided to beneficiaries without satisfying medical-necessity or physician-prescription requirements.
Michelle King, who served as president and CEO of Crown Medical and owned 50% of the company, and Philanzo King, vice president and the remaining 50% shareholder, are both named in the agreement. The settlement reflects their financial circumstances, with payments structured as $25,000 upfront and the balance, $800,000 plus interest, due by the end of 2028. The defendants are jointly and severally liable for the full amount.
The settlement does not constitute a finding that the defendants committed fraud. The Justice Department emphasized that the claims are allegations only, and no liability has been determined. The case was originally filed in April 2019 by Karen Martinelli, a relator under the False Claims Act, which allows private individuals to sue on behalf of the government and receive a share of recovered funds. Martinelli is set to receive approximately $123,750, or 15% of the settlement.
The case illustrates why documentation surrounding durable medical equipment can create significant False Claims Act risk. The allegations did not centre on whether equipment physically reached beneficiaries, but on whether the claims submitted to Medicare were supported by medical necessity and proper physician prescriptions. For healthcare suppliers, that distinction is important. Billing systems need to be capable of linking a reimbursement claim to the clinical and prescription records required by the relevant Medicare rules before payment is sought.
The resolution was coordinated by the Justice Department’s Civil Division, Commercial Litigation Branch, and the U.S. Attorney’s Office for the Northern District of Georgia.
