USA V Snap Diagnostics, LLC, Gil Raviv and Stephen Burton (1:15-cv-06204)

Case: 1:15-cv-06204 Document #: 29 Filed: 12/18/17 Page 1 of 54 PageID #:546
UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES OF AMERICA, STATE )

OF CALIFORNIA, STATE OF )
COLORADO, STATE OF CONNECTICUT, )
STATE OF DELAWARE, DISTRICT OF )
COLUMBIA, STATE OF FLORIDA, )
STATE OF GEORGIA, STATE OF )
ILLINOIS, STATE OF INDIANA, STATE )
OF LOUISIANA, STATE OF )
MARYLAND, COMMONWEALTH OF )
MASSACHUSETTS, STATE OF )
MICHIGAN, STATE OF MINNESOTA, )
STATE OF NEVADA, STATE OF NEW )
JERSEY, STATE OF NEW MEXICO, )
STATE OF NEW YORK, STATE OF )
NORTH CAROLINA, STATE OF )
OKLAHOMA, STATE OF RHODE ) No. 14 C 3988
ISLAND, STATE OF TENNESSEE, STATE )
OF TEXAS, COMMONWEALTH OF ) Judge Norgle
VIRGINIA, STATE OF WASHINGTON )
and STATE OF WISCONSIN ex rel. )
CHRISTOPHER PIACENTILE, )
)
Plaintiffs, )
v. )
)
SNAP DIAGNOSTICS LLC, GIL RAVIV, )
PH.D., STEPHEN BURTON, LESLIE )
GARDEA, APRIA HEALTHCARE )
GROUP, INC., LINCARE HOLDINGS, )
INC., DME DOES and PHYSICIAN DOES, )
)
Defendants. )
UNITED STATES OF AMERICA, STATE )
OF CALIFORNIA, STATE OF )
COLORADO, STATE OF CONNECTICUT, )
STATE OF DELAWARE, STATE OF )
FLORIDA, STATE OF GEORGIA, STATE )
OF ILLINOIS, STATE OF INDIANA, )
STATE OF IOWA, STATE OF )
LOUISIANA, STATE OF MARYLAND, )
COMMONWEALTH OF )
MASSACHUSETTS, STATE OF )
MICHIGAN, STATE OF NEVADA, )

STATE OF NEW JERSEY, STATE OF )
NEW YORK, STATE OF NORTH )
CAROLINA, STATE OF OKLAHOMA, )
STATE OF RHODE ISLAND, STATE OF )
TENNESSEE, STATE OF TEXAS, )
COMMONWEALTH OF VIRGINIA, )
STATE OF WASHINGTON, STATE OF )
WISCONSIN, CITY OF NEW YORK, and )
DISTRICT OF COLUMBIA, ex rel. JOHN )
DOE, )
) No. 15 C 6204
Plaintiffs, )
) Judge Norgle
v. )
)
SNAP DIAGNOSTICS, LLC, SNAP )
LABORATORIES INTERNATIONAL, )
LLC, GIL RAVIV, Ph.D., AYELETTE )
RAVIV, S. JERRY PINTO, M.D., LISA )
SHIVES, M.D., THOMAS J. KEHOE M.D., )
PARVESH K. BANSAL M.D., and )
MANHATTAN CARDIOLOGY, )
)
Defendants. )
UNITED STATES OF AMERICA, )
) No. 14 C 3988
Plaintiff-Intervenor, ) No. 15 C 6204
v. )
) Judge Norgle
SNAP DIAGNOSTICS, LLC, GIL RAVIV, )
and STEPHEN BURTON, ) JURY TRIAL DEMANDED
)
Defendants. )
COMPLAINT IN INTERVENTION OF THE UNITED STATES OF AMERICA
The United States of America, by John R. Lausch, Jr., United States Attorney for the
Northern District of Illinois, having filed a notice of intervention against Snap Diagnostics, LLC,
Gil Raviv, and Stephen Burton, pursuant to 31 U.S.C. 3730(b)(4), alleges as follows:
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Introduction
1. This is a civil fraud action brought by the United States against SNAP Diagnostics,
LLC, a home sleep testing company, Gil Raviv, its owner and president, and Stephen Burton,
SNAPs marketing and business development executive, seeking treble damages and civil
penalties under the False Claims Act, 31 U.S.C. 3729-3733, and the Anti-Kickback Statute, 42
U.S.C 1320a-7a.
2. SNAP Diagnostics is a nationwide provider of home sleep testing diagnostic
services. SNAPs home sleep testing services are covered by Medicare and other federal programs
where they are, among other requirements, medically necessary to diagnose obstructive sleep
apnea. Over the years, Medicare has paid SNAP nearly $9 million in reimbursements for claims
submitted for those services. However, instead of complying with the Medicare rules for its
providers and providing honest certifications on each of its required forms, SNAPat the direction
of its president Gil Raviv, with the assistance of Stephen Burtonknowingly engaged in numerous
fraudulent business practices that caused tens of thousands of false claims for medically
unnecessary home sleep testing services and services occasioned by kickbacks.
3. Despite knowing that only a few hours of home sleep testing in a single night was
needed for SNAPs home sleep test recorders to diagnose OSA, SNAPat the direction of
Ravivroutinely double- and triple-billed federal healthcare programs, including Medicare, by
submitting claims for beneficiaries medically unnecessary second and third nights of home sleep
testing. They also unnecessarily and unlawfully multiplied the copays of seniors on Medicare.
SNAP did so while regularly diagnosing OSA from a single home sleep test on patients who were
not Medicare beneficiaries. This caused Medicare to pay millions of dollars in false claims.
4. In addition, SNAPs business model relied on several unlawful kickback schemes.
First, SNAP interpreted the results of its home sleep tests and then gave its referring physicians
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unsigned reports of those interpretations to let them keep the billing for the professional
component of home sleep testing services. According to Burton, giving physicians this billing
drives the volume of SNAPs business. Second, SNAP used independent contractors to directly
market SNAPs services to referring physicians, and SNAP paid those contractors commissions
per sleep test sold, claimed, and paid, including for Medicare beneficiaries. Third, as part of
pitching their business, SNAP gave providers and their families, as well as key provider staff
members, free or no copay home sleep tests in order to induce them to refer all of their home sleep
testing services to SNAP. Because SNAPs business model was based upon offers of kickbacks,
all of the nearly $9 million SNAP has received from Medicare was the result of false certifications
in forms submitted to Medicare, which required the provider not to engage in unlawful kickbacks.
5. Since Medicare began covering home sleep testing in 2009, SNAP, Raviv, and
Burtons fraudulent practices have cost the United States millions of dollars in health care program
payments for medically unnecessary services and services referred upon offers of kickbacks.
Jurisdiction and Venue
6. This court has jurisdiction over the claims pursuant to 31 U.S.C. 3730(a) and 28
U.S.C 1331, 1345.
7. Venue lies in this district pursuant to 31 U.S.C. 3732(a) and 28 U.S.C. 1391(b),
because the defendants reside in this district, and the acts set out herein occurred in this district.
Parties
8. Plaintiff is the United States of America on behalf of its agencies, including the
United States Department of Health and Human Services, the United States Railroad Retirement
Board, and the United States Office of Personnel Management.
9. Defendant SNAP Diagnostics, LLC, is a provider of home sleep testing services,
enrolled with Medicare and other federal programs, and has its principal place of business in
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Wheeling, Illinois.
10. Defendant Gil Raviv is the founder, owner, and president of SNAP Diagnostics, LLC
and upon information and belief resides in Northbrook, Illinois.
11. Defendant Stephen Burton is the Vice President of Marketing & Business
Development for SNAP Diagnostics, LLC, and, according to his professional biography, is also a
co-founder and investing partner. Upon information and belief, he resides in Chicago, Illinois.
Facts
I. Statutory Framework
A. The False Claims Act
12. The False Claims Act (FCA) provides for the award of treble damages and civil
penalties for, among other things, knowingly presenting or causing to be presented false or
fraudulent claims for payment to the United States government and for knowingly making or using
false records or statements material to false or fraudulent claims paid by the United States. 31
U.S.C. 3729(a)(1), (2); 31 U.S.C. 3729(a)(1)(A), (a)(1)(B) (as amended).
13. The FCA provides, in pertinent part, that a person who:
(a)(1)(A) knowingly presents, or causes to be presented, a false or fraudulent claim for

payment or approval; or
(a)(1)(B) knowingly makes, uses, or causes to be made or used, a false record or statement
material to a false or fraudulent claim; . . .
is liable to the United States Government for a civil penalty of not less than $5,500 and not
more than $11,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of
1990 (28 U.S.C. 2461 note; Public Law 104-410), 1 plus 3 times the amount of damages
which the Government sustains . . . .
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For violations of the FCA after November 2, 2015, the penalties range is $10,781 to
$21,563.
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31 U.S.C. 3729. 2
14. For purposes of the False Claims Act,
(1) the terms knowing and knowingly

(A) mean that a person, with respect to information
(i) has actual knowledge of the information;
(ii) acts in deliberate ignorance of the truth or falsity of the information; or
(iii) acts in reckless disregard of the truth or falsity of the information; and
(B) require no proof of specific intent to defraud[.]
31 U.S.C. 3729(b)(1).
15. The standard of proof under the FCA is preponderance of the evidence. 31 U.S.C.
3731(d).
B. The Anti-Kickback Statute
16. The Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), arose out of Congressional
concerns involving physicians conflicts of interest and overutilization of medical services and
items. First enacted in 1972, Congress strengthened the statute in 1977 and 1987 to ensure that
kickbacks masquerading as legitimate transactions did not evade its reach. See Social Security
Amendments of 1972, Pub.L. No. 92-603, 242(b) and (c); 42 U.S.C. 1320a-7b, Medicare-
Medicaid Anti-Fraud and Abuse Amendments, Pub. L. No. 95-142; Medicare and Medicaid
Patient and Program Protection Act of 1987, Pub. L. No. 100-93.
17. The Anti-Kickback Statute prohibits any person or entity from making or accepting
payment to induce or reward any person for referring, recommending or arranging for federally
2
The FCA was amended pursuant to Public Law 111-21, the Fraud Enforcement and
Recovery Act of 2009 (FERA), enacted May 20, 2009. Given the nature of the claims at issue,
Sections 3279(a)(1) and 3729(a)(2) of the prior statute and Sections 3729(a)(1)(A) and
3729(a)(1)(B) of the revised statute are all applicable here. Sections 3729(a)(1) and 3729(a)(2)
apply to conduct that occurred before FERA was enacted, and Sections 3729(a)(1)(A) and
3729(a)(1)(B) apply to conduct after FERA was enacted. Section 3729(a)(1)(B) is applicable to
all claims in this case pending on or after June 7, 2008, by virtue of Section 4(f) of FERA.
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funded medical services, including services provided under the Medicare and Medicaid programs.
In relevant part, 42 U.S.C. 1320a-7b(b) provides:
(1) Whoever knowingly and willfully solicits or receives any remuneration (including any
kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind
(A) in return for referring an individual to a person for the furnishing or arranging
for the furnishing of any item or service for which payment may be made in whole
or in part under a Federal health care program, or
(B) in return for purchasing, leasing, ordering or arranging for or recommend

purchasing, leasing or ordering any good, facility, service, or item for which
payment may be made in whole or in part under a Federal health care program,
shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000
or imprisoned for not more than five years, or both.
(2) Whoever knowingly and willfully offers or pays any remuneration (including any
kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any
person to induce such person
(A) to refer an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part under a Federal health care program, or
(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or

ordering any good, facility, service, or item for which payment may be made in
whole or in part under a Federal health care program,
shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000
or imprisoned for not more than five years, or both.
18. The statute has been interpreted to cover any arrangement where one purpose of the
remuneration was to obtain the referral of services or to induce further referrals. See, e.g., United
States v. Nagelvoort, 856 F.3d 1117 (7th Cir. 2017).
19. Compliance with the Anti-Kickback Statute is a condition of payment by the
Medicare program. In addition, violation of the statute can subject the perpetrator to exclusion
from participation in federal health care programs and to civil monetary penalties of $50,000 per
violation and three times the amount of remuneration paid. 42 U.S.C. 1320a-7(b)(7) and 42
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U.S.C. 1320a-7a(a)(7).
20. A claim that includes items or services resulting from a violation of this section
constitutes a false or fraudulent claim for purposes of the FCA. 42 U.S.C. 1320a7b(g).
II. Diagnosis and Treatment of Obstructive Sleep Apnea
21. Obstructive Sleep Apnea (OSA) is a common sleep disorder in which the
oropharyngeal walls collapse and airflow is obstructed during sleep. Individuals with OSA
frequently start and stop breathing during sleep. Clinically, OSA is defined by the occurrence of
daytime sleepiness, loud snoring, witnessed breathing interruptions, or awakenings due to gasping
or choking in association of at least five obstructive respiratory events per hour of sleep.
22. The diagnosis and severity of OSA must be established prior to the commencement
of treatment. Several diagnostic tests for OSA exist. Polysomnography (PSG), the most
commonly employed comprehensive diagnostic sleep test, is furnished in a sleep laboratory
facility, where the patient spends the night while a technologist supervises the recording of data
and remains available to intervene if necessary. Portable monitors (used both in attended and
unattended settings) also have been developed for the diagnosis of OSA.
23. Home sleep testing (HST) utilizes a portable monitor, unattended and initiated
by the patient, to collect information about breathing and oxygen levels during sleep while the
patient sleeps at home. Home sleep monitors are typically classified into three categories: (i) Type
2, a full unattended polysomnography device with seven or greater channels for collecting sleep
data; (ii) Type 3, a limited channel device (with between four and seven channels); and (iii) Type
4, a one- or two-channel device, usually using oximetry (a measurement of oxygen in the blood)
as one of the parameters.
24. The indices commonly used to assess sleep disordered breathing are the apnea-
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hypopnea index (AHI) and the respiratory disturbance index (RDI). Either or both may be used in
test results to determine whether a patient has OSA.
25. Although other less expensive methods exist, patients diagnosed with OSA are
commonly treated with continuous positive airway pressure (CPAP), a non-invasive technique for
providing air pressure via a nose mask, and intended to prevent the collapse of the oropharyngeal
walls and the obstruction of airflow during sleep.
III. Medicare and Other Federal Benefit Coverage for Home Sleep Testing
26. The Medicare program was enacted in 1965 under Title XVIII of the Social
Security Act to pay for certain healthcare services for older Americans. The Department of Health
and Human Services (HHS) administers the Medicare Program through the Center for Medicare
& Medicaid Services (CMS).
27. Medicare is divided into four parts: Part A, Part B, Part C, and Part D. This case
concerns payments made under Medicare Part B. Medicare Part B covers, among other things,
payment for physicians services, services and supplies incident to physicians services, diagnostic
tests, and durable medical equipment, or DME, which includes CPAP machines, for use in
beneficiaries homes.
28. The United States reimburses Medicare providers with payments from the
Medicare Trust Fund through CMS, as supported by American taxpayers. CMS, in turn, contracts
with private contractors, referred to as fiscal intermediaries, carriers, and Medicare
Administrative Contractors (MACs), to act as agents in reviewing and paying claims submitted
by healthcare providers. 42 U.S.C. 1395h; 42 C.F.R. 421.3, 421.100.
29. Physicians, clinics, and other health care providers that provide services to
Medicare beneficiaries are able to apply for and obtain a Medicare provider number. All Medicare
9
providers must enroll in the program as providers and are expected to deal honestly with the
government and with patients. Because it is not feasible for the Medicare program or its
contractors to review the patient files for the millions of claims for payments it receives, the
Medicare program relies upon the providers to comply with the Medicare requirements and trusts
the providers to submit truthful and accurate claims.
30. Medicare regulations require providers and suppliers to comply with applicable
statutes, regulations, and guidelines in order to be reimbursed by Medicare. When participating in
Medicare, a provider has a duty to be knowledgeable of the statutes, regulations, and guidelines
for coverage of services. 42 C.F.R. 424.516(a)(1); 42 C.F.R. 424.516(a)(2).
31. Among other restrictions on coverage, Medicare covers only services that are
medically necessary. 42 U.S.C. 1395y(a)(I)(A). According to Medicare.gov, medically
necessary is defined as health-care services or supplies needed to prevent, diagnose, or treat an
illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.
32. All Medicare providers must have, in each of their patients files, the medical
documentation to establish that the Medicare items or services for which they have sought
Medicare reimbursement are reasonable and medically necessary. 42 U.S.C. 1395y(a)(1)(A); 42
U.S.C. 1395g(a).
33. An Independent Diagnostic Testing Facility (IDTF) is an entity that is
independent of a physician office or hospital. Its purpose is to furnish diagnostic tests. 42 C.F.R.
410.33.
34. Form CMS-855B is the Medicare Enrollment Application for providers, including
IDTFs. IDTFs must enter into participation agreements with Medicare using Form CMS-855B to
establish eligibility to participate in the Medicare program. IDTFs also complete CMS-855B to
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change information or to reactivate, revalidate, and/or terminate Medicare enrollment.
35. An authorized official must sign the Certification Section in Section 15 of Form
CMS-855B, which, in 2008 and 2009 when submitted by SNAP, stated that it legally and
financially binds the supplier to the laws, regulation, and program instructions of the Medicare
program. The individual signing the certification statement also certifies that he or she has read
the information provided in the enrollment form and that the information is true, correct, and
complete and that he or she takes on a duty to correct any information subsequently found to be
not true, correct, or complete.
36. SNAP Diagnostics enrolled with Medicare as an IDTF. In that enrollment
document, defendant Gil Raviv designated himself an authorized official of SNAP Diagnostic,
LLC, and signed the certification statement as its president in Section 15 of Form CMS-855B
submitted by SNAP, indicating that he understood that SNAP was legally and financially required
to comply with Medicare laws, regulations, and program instructions.
37. Once a provider is enrolled with Medicare, the provider is assigned a National
Provider Identifier (NPI), a standard and unique health identifier for health care providers. A
provider is required to use its NPI to identify itself on all standard transactions that it conducts
where its health care provider identifier is required. 45 C.F.R. 162.410(a). SNAP has an
assigned NPI with the Medicare program.
38. A health care provider issued an NPI can file claims with Medicare to provide
reimbursement for services provided to beneficiaries. To do so, they must submit a CMS 1500
claim form or its electronic equivalent. That form contains information required to obtain
reimbursement. Among other things, this includes the NPI, the beneficiarys name, health
insurance claim number, dates of service, locations of service, type of services, number of services,
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the (HCPCS or CPT) procedure codes, diagnostic codes, charges, and the providers Provider
Transaction Access Number. A blank copy of a Form CMS 1500 is available at
https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS1500.pdf.
39. The CMS 1500 claim form contains certifications that must be signed in order for
the claim to be paid. Those certifications include, among other things, that: (1) the information
provided is true, accurate, and complete; (2) the provider is familiar with, and the claim complies
with, all applicable laws, regulations, and program instructions for payment, including but not
limited to the Federal anti-kickback statute and the Stark Law; (3) the services were medically
necessary, and (4) the services were furnished personally by the provider or an employee thereof.
40. Form CMS-1500 also states, No Part B Medicare benefits may be paid unless this
form is received as required by existing law and regulations (42 CFR 424.32).
41. As an enrolled provider, SNAP has submitted at least tens of thousands of claims
to CMS contractors for home sleep testing services using Form CMS 1500 or its electronic
equivalent.
A. Medicare Coverage for Independent Diagnostic Testing Facilities Home Sleep

Testing Services
42. Effective March 3, 2009, CMS determined that unattended home sleep testing, with
certain types of devices, would be covered to aid the diagnosis of OSA in beneficiaries who have
clinical signs and symptoms indicative of OSA. CMS National Coverage Determination for
Sleep Testing for Obstructive Sleep Apnea, 240.4.1.
43. Federal programs other than Medicare also cover home sleep testing services as
part of their benefits. These include the Railroad Retirement Boards program, which provides
benefits for RRB employees and retirees; the Federal Employees Health Benefit Program, which
provides health care benefits for qualified federal employees and their dependents; and TRICARE,
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which provides benefits for healthcare services furnished by civilian providers, physicians, and
suppliers to members of the Uniformed Services and to spouses and children of active duty, retired,
and deceased members.
44. An Independent Diagnostic Testing Facility that provides home sleep testing must
have one or more supervising physicians who are responsible for quality oversight, operation and
calibration of equipment, and the qualifications of non-physician IDTF personnel who use the
equipment.
45. All procedures performed by the IDTF must be specifically ordered in writing by
the physician or practitioner who is treating the beneficiary, that is, the physician who is furnishing
a consultation or treating a beneficiary for a specific medical problem and who uses the results in
the management of the beneficiarys specific medical problem. This is required for the tests to be
considered reasonable and medically necessary, as well as for them to be reimbursed by Medicare.
IDTFs may not add any procedures based on their own internal protocols without a written order
from the treating physician.
46. Medicare administrative contractors (MACs) provide further guidance regarding
what claims will be paid, and they also adjudicate payment of those claims. From time to time,
MACs publish Local Coverage Determinations (LCDs) to provide more specific information
about the coverage for certain services in its jurisdiction. CMS, Medicare Program Integrity
Manual, Pub. No. 100-08, ch. 13, 13.1.3.
47. From the time that Medicare began covering home sleep testing until September 6,
2013, the Part B MAC for providers in Illinois was Wisconsin Physicians Services (WPS). In
December 2010, WPS published its LCD for Polysomnography and Other Sleep Studies
(L31082). That LCD provided information about what sleep testing services were covered and
how they should be claimed.
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48. LCD L31082 stated that unattended home sleep tests, which may be claimed under
HCPCS codes G0398, G0399, and G0400, are:
. . . covered for the purpose of testing a patient for the diagnosis of

obstructive sleep apnea if the home sleep testing is reasonable and
necessary for the diagnosis of the patients condition, meets all other
Medicare requirements, and the physician who performs the service
has sufficient training and experience to reliably perform the
service. A home sleep test is covered only when it is performed in
conjunction with a comprehensive sleep evaluation and in patients
with a high pretest probability of moderate to severe obstructive
sleep apnea. Home sleep testing is not covered for persons with
comorbidities (moderate to severe pulmonary disease,
neuromuscular disease or congestive heart failure). Home Sleep
studies are only covered for the diagnosis of Obstructive Sleep
Apnea. They are not covered for any other sleep disorders (central
sleep apnea, periodic limb movement disorder, insomnia,
parasomnias, circadian rhythm disorders or narcolepsy) or for
screening asymptomatic persons.
49. LCD L31082 contained guidance making clear to diagnostic test providers that one
sleep testing session is typically necessary and only one claim should be submitted per session,
stating: Ordinarily, a single polysomnogram and electroencephalogram (EEG) can diagnose sleep
apnea. If more than one such testing session is claimed, the carrier will require persuasive medical
evidence justifying the medical necessity for the additional test (CMS Publication 100-02,
Medicare Benefit Policy Manual, Chapter 15, Section 70).
50. The LCDs Utilization Guidelines echoed that guidance and, more specifically,
stated that a home sleep test should not occur more often than once in a single year in the normal
course, stating: More than one [home sleep test] HST per year interval would not be expected. If
more than one HST session is performed for suspected OSA, persuasive medical evidence
justifying the medical necessity for the additional tests will be required.
51. LCD L31082 also had specific training and certification requirements for the
physicians and technologists performing the HST services. A physician performing the service
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must be have specified training in sleep medicine.
52. As of September 7, 2013, National Government Services (NGS) became the MAC
for Medicare Part B in Illinois. At that time, NGS had recently retired its LCD for
Polysomnography and Sleep Studies (L26428). That LCD quoted the same language as that
quoted above in paragraph 50. It further stated: If more than one testing session is performed for
sleep studies for suspected sleep apnea, persuasive medical evidence justifying the medical
necessity for the additional tests will be required.
53. Medicare has long covered CPAP devices in certain circumstances for those
diagnosed with OSA where the beneficiary has a face-to-face clinical evaluation by the treating
physician prior to the sleep test to assess the beneficiary for obstructive sleep apnea, the
beneficiary has taken a covered sleep test, and the findings of the test are either 1) The apnea-
hypopnea index (AHI) or Respiratory Disturbance Index (RDI) is greater than or equal to 15 events
per hour with a minimum of 30 events; or, 2) The AHI or RDI is greater than or equal to 5 and less
than or equal to 14 events per hour with a minimum of 10 events and documentation of: a.
Excessive daytime sleepiness, impaired cognition, mood disorders, or insomnia; or, b.
Hypertension, ischemic heart disease, or history of stroke[;] and the beneficiary and/or their
caregiver has received instruction from the supplier of the device in the proper use and care of the
equipment. NGS LCD for Positive Airway Pressure (PAP) Devices for the Treatment of
Obstructive Sleep Apnea (L27230) (Retired).
54. The notion that a single sleep test is necessary to diagnose OSA also permeates
Medicare guidance with respect to its coverage for the durable medical equipment, like CPAP, that
is used to treat a patient who has received an OSA diagnosis. For example, while NGS LCD
L27230, which was in effect from 1993 through September 2015, did not determine coverage for
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the HST resulting in the diagnosis, but instead the CPAP device used to treat the condition, the
LCD provided a clear statement of the necessary diagnostic process for a valid diagnosis of OSA,
in order to warrant coverage of the treatment. Because diagnosis of OSA is the only medically
necessary purpose of a home sleep test under Medicare rules, what the DME MAC considered
necessary for diagnosing OSA and covering treatment of the condition is important. NGSs LCD
makes clear that just a single home sleep test is the necessary basis for the diagnosis and the follow-
on treatment.
55. In relevant part, with emphasis added to highlight the description of the qualifying
test as a single test, it states: Coverage of a PAP device for the treatment of OSA is limited to
claims where the diagnosis of OSA is based upon a sleep test (Type I, II, III, IV, Other) that meets
the Medicare coverage criteria in effect for the date of service of the claim for the PAP device.
The sleep test must be either a polysomnogram performed in a facility based laboratory (Type I
study) or an inpatient hospital-based or home based sleep test (HST) (Types II, III, IV, Other).
The test must be ordered by the beneficiarys treating physician and conducted by an entity that
qualifies as a Medicare provider of sleep tests and is in compliance with all applicable state
regulatory requirements. (Emphasis added).
56. Likewise, from January 2011 through September 2015, NGS had an LCD for Oral
Appliances for Obstructive Sleep Apnea (L28601), regarding another treatment avenue. This LCD
had virtually identical language to LCD L27230, which again made clear that Medicare required
only a single, qualifying home sleep test to diagnose OSA and have Medicare cover an oral
appliance to treat the condition.
57. Other MACs for other jurisdictions likewise have been clear that Medicare expects
only one claim for a diagnostic home sleep study in the normal course. For example, CGS
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Administrators LCD Polysomnography and Other Sleep Studies (L36902) includes the same
Utilization Guidelines as the WPS LCD described above, stating: More than one [home sleep
test] HST per year interval would not be expected. If more than one HST session is performed for
suspected OSA, persuasive medical evidence justifying the medical necessity for the additional
tests will be required.
IV. The Health Care Fraud Scheme
58. SNAP Diagnostics, in its present incarnation and as its predecessor entity, SNAP
Laboratories, was in the home sleep testing business for many years before Medicare began
covering HST in 2009. SNAP uses its own proprietary Type III home sleep testing recorders to
provide home sleep testing services to patients nationwide.
59. Gil Raviv is SNAPs founder and president. According to SNAPs lab director, the
accounting director, and others, Raviv is the ultimate decision maker at SNAP and makes the rules
about its policies and practices, including sales and marketing, billing and reimbursement.
60. SNAPs marketing has relied, since at least 2009 (and likely before), on the use of
independent contractor sales representatives. SNAP called them territory managers, or TMs,
because each is responsible for the referring physicians in a particular geographic area. These
TMs pitched the SNAP service to physicians in their territory and otherwise maintained the
accounts of those referring physicians, including facilitating the distribution of the recording
devices to physicians offices and patients.
61. In SNAPs marketing process, the first marketing meeting a territory manager held
at a physicians office was called a Lunch & Learn. That pitch meeting entailed the territory
manager speaking to the physician and office staff regarding the SNAP services, as well as
extolling the monetary benefits that result from referring patients to SNAP. As discussed in more
17
detail below in Section IV.B.3, a key strategy for the lunch & learn pitch meeting was for the TM
to get the agreement of a provider, providers family member, or a key staff member or that staff
members family member, to take a first test for the practice.
62. The logistical process for providing SNAPs recorders to referred patients operated
as follows: physicians who referred a significant number of diagnostic services kept SNAP sleep
recorders in their office, in a system they call consignment. Alternatively, SNAP ships the
recorders directly to referred patients. TMs often trained the physicians staff how to use the
recorders, and the staff in turn trained the referred patients. TMs also directly trained the patients
themselves.
63. After taking the test, either the patient or the physicians office, would return the
recorder data cartridge (or later, after multi-night testing began, cartridges). SNAPs lab
technicians would analyze and process the results, andfor Medicare patientsSNAPs board-
certified sleep medicine doctors, who SNAP called reading physicians, would interpret the test
and issue a report to be provided to the referring physician.
64. Stephen Burton oversees marketing and business development for SNAP,
particularly with respect to the referring physicians. He also directly recruited territory managers,
and guided and trained them on pitching physicians to get their business. SNAP managers and top
executives, including Burton, led trainings of new or potential territory managers at its Illinois
headquarters. At those trainings, SNAP taught the territory managers how to carry out direct
marketing strategies to sell their home sleep tests to physicians. Through those territory managers,
SNAP was able to facilitate its fraudulent schemes, including medically unnecessary multiple night
testing, and providing kickbacks to physicians in order to drive the volume of SNAPs business.
18
A. Defendants Fraudulent Practice of Routinely Submitting Multiple

Unnecessary HST Claims to Medicare Per Beneficiary
1. SNAPs Original Protocol of Single Night Testing
65. Prior to Medicare coverage of SNAPs home sleep testing services, SNAPs routine
practice was to have each patient record a single night of sleep in order to diagnose sleep apnea.
Gil Raviv, in his role as the President of SNAP, advocated to CMS for Medicare to cover home
sleep testing services. In a July 13, 2004 letter that he wrote to CMS, promoting Medicare approval
of HST as an alternative to in-lab polysomnography, Raviv indicated that only one night of HST
is required to diagnosis OSA.
66. Specifically, in his letter, one of Ravivs arguments in favor of Medicare covering
HST was the cost savings associated with HST versus PSG. He presented the below comparison
charts, showing the HST cost for a beneficiary as its one-claim/one-night cost in 2004: $208 (the
Medicare claim payment for a home sleep test has now increased to approximately $230,
comprised of Medicares direct reimbursement and the beneficiarys copay):
67. In that 2004 communication to CMS, Raviv clearly expressed the view that the total
cost for a patient with OSA would be that of a single home sleep test claim and the resulting cost
of the CPAP equipment to treat OSA.
68. Medicare began covering unattended home sleep tests for the purpose of diagnosing
19
OSA in March 2009, as discussed above in Section III.
69. The SNAP HST recorders cartridge has a maximum recording capacity of 338
minutes (just under six hours). At the time that Medicare began covering HST, SNAPs practice
remained the same as it had always been: to have each patient utilize the sleep recorder for one
night. SNAPs reading physicians would provide a report with a finding of the patients sleep
apnea (or RDI) score from that amount of data. SNAPs Medicare claims data for the first many
months of its provision of Medicare-covered home sleep tests reflect that SNAP did not submit
second or third claims for a beneficiarys second or third nights of home sleep testing during that
period.
70. SNAP, Raviv, and Burton knew that only a single home sleep test was medically
necessary to diagnose OSA. Indeed, sales training documents in use by SNAP until at least 2014
reflected this knowledge. SNAPs training materials included SNAP Diagnostics Sales FAQs,
which included the following question and answer:
71. Those attending the three-day SNAP sales training were also provided with the
SNAP Diagnostics Sales Training: Pre-Work Study Guide as well as the Answer Key,
Comprehensive Exam, both of which reiterated the need for only an hour or two of data to reach
a diagnosis. Each included the following questions and answers: How long does the SNAP unit
record for and how does that effect the accuracy? The Snap unit will record for 6 hours. As most
sleep labs now conduct a split-night study where they diagnose the patient in less than three hours,
20
the total sleep time may actually be only an hour or two. With SNAP you not only can do 6 hours
but if the doctor really wants we will record a second night at no charge. Using SNAPs 3 hours
of sleep is more than enough with a mild or moderate apneic patient. If they are severe often 1
hour is enough. The next question and answer on each document was as follows: How much
data do you need to get an accurate study? 1-2 Hours[.]
72. SNAP TMs gave referring physicians (or potential referrers) a document entitled
SNAP Report Explanation. Regarding the recording time, it read: Note that 200 minutes of
sleep time will normally encompass at least two complete sleep cycles (Stage 1 through REM
sleep), which is the basis of a good data set. However, according to SNAPs lab director, only
120 minutes of data is necessary for a clinically significant analysis and report.
73. SNAP had outside business investors. In November 2009, Gil Raviv wrote a letter
to SNAPs investors, regarding the results of the third quarter and the first nine months of 2009.
The letter referenced the companys struggles with sales and test volume, stating that sales are
still not tracking where we would like them to be, but that [a]s we move forward, we are
confident that test volume will follow.
74. At that time, SNAP had a home sleep testing competitor, Sleep Solutions, which
used different technology and required patients use the test for three nights. In February 2010, Gil
Raviv drafted a comparison between Sleep Solutions and SNAP, and emailed it to managers at the
company, for further distribution to the sales force. Therein, he identified Sleep Solutions three
night testing requirement as a point of contrast in SNAPs favor, because it was a huge
requirement, uncomfortable, and only a few physicians had requested it:
21
75. Ravivs comparison with Sleep Solutions makes clear that he did not consider
multiple night testing necessary. Further, he stated that, when he permitted multi-night testing
upon request, SNAP did not charge extra for the additional night of testing. Soon, however, SNAP
began to follow in Sleep Solutions footsteps.
2. SNAP Begins Multi-Night Testing and Routinely Claiming Two Tests for
Medicare Beneficiaries
76. Later that same year, at the direction of Gil Raviv, SNAP changed its testing
protocol. It did not do so because of any new requirement to have multiple OSA diagnostic test
results. Instead, SNAP sometimes received recording cartridges from patients where the data was
corrupted or had not recorded, resulting in a blank test. Purportedly to reduce the frequency of
these blank tests and avoid the need to retest, SNAP began to have its territory managers tell
providers and patients that the sleep testing recorder should be worn for two nights.
77. A letter drafted from Gil Raviv to a referring provider, dated October 13, 2010,
stated that SNAP Diagnostics, your provider for home sleep testing, is pleased to offer the option
of Multi-Night Sleep testing for your practice. We currently recommend testing your patient for
a second night in the event the first night resulted in insufficient time, poor quality data or in an
entirely blank test. Providing a second night recording will significantly minimize the need to call
the patient and have him/her pick up the unit for a repeat test. In addition, having two night tests
22
may reduce the effect of night-to-night variability. . . . You will get the patient report the same as
you do today and you may receive one or two reports based on the quality of the recordings and
the clinical significance of the analysis.
78. On October 18, 2010, SNAPs National Sales Director emailed the territory
managers and informed them that SNAP was changing its protocol to pitch to physicians that
patients should take a test for two nights. The email gave them UPDATED Multi-Night Testing
Key Points beginning with: This option will SUBSTANTIALLY reduce the number of BLANK
tapes received because statistically one of two nights have a completed test. The email stated
that: Multi-Night Testing will increase patient compliance & convenience when a patient is
requested to be re-tested as the result of no data single night was BLANK. Save time for physicians
& staff trying to get patient to return for another test. Two studies will not always equal two
reports. The number of reports we send will be based on the quality of the recording or clinical
significance.
79. In reply to that email, a territory manager stated she was unsure about the billing
part. The Sales Director responded that we are not talking to [the physicians] about billing
because we are not sure if they will be able to bill for more testing and there will be many times
there will only be one result because 1 of the 2 nights was BLANK or incomplete and we were
only able to use 1 of the 2 nights. If we do send 2 reports and a Dr. would ask about billing for 2
nights, I would ask them how do they handle other similar billing situations in their office when
more than one test is done on the same pt (back to back or same date of service, i.e. lab, imaging.
. .
80. The territory manager was not appeased and asked whether it would entail billing
two tests: Thanks, but I meant as far as us billing the patient and their insurance twice? Im
23
getting alot [sic] of questions and the docs are not going to do it until they know.
81. The territory manager was correct that this protocol change meant billing the
patient and their insurance twice. And, notably, in response to her question, the Sales Director
did not cite to any guidance or rule that SNAP was following in claiming multiple tests.
82. While SNAP was publicly stating that its change to two nights of testing was to
resolve the problem of blank tests and to avoid retests, and telling providers that they would get
one or two reports depending on clinical significance, internally SNAP began to routinely analyze
and claim multiple tests per patient, particularly where the patient was a Medicare beneficiary. In
October 2010, Raviv approved a protocol for both his lab director and accounting director to
follow, that, for Medicare patients, SNAP should automatically analyze and claim to Medicare
both nights of testing.
83. Gil Raviv did not issue the blanket rule to analyze and claim both nights for other
insurances, besides Medicare, or for self-pay patients. For those patients, the process described in
a October 27, 2010 email from the lab director to Raviv and the accounting director was that the
lab director or her staff would communicate with the director of accounting to determine how
many nights of testing SNAP should analyze. The lab director would inform the accounting
director how many nights of testing SNAP had received for the patient, and the accounting director
would them inform the lab director how many tests she should have processed and analyzed.
84. The determination of how many tests to analyze was based upon an assessment that
SNAP had made about how many claims each patients insurance was likely to pay, not based
upon a clinical determination about the specific patients needs at that time, i.e., whether multiple
tests were, for some unusual reason, medically necessary in order to diagnose a patients OSA.
85. Following that procedure, sometimes the accounting directors answer was that the
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lab should analyze, or score, one test. In that case, the process set by Gil Raviv was as follows:
if the accounting director said to score one night, the lab technician was to select the night of
testing with the highest preliminary RDI score, i.e. the one most likely to result in the most severe
sleep apnea diagnosis. That was easily done. In SNAPs lab, the recording cartridge for each
nights test can be inserted into SNAPs computer. Then, raw results, including the preliminary
RDI score, immediately populate in the computer.
86. SNAPs lab director described the process of selecting the night with the highest
preliminary RDI, in a February 21, 2011 email to a TM who had inquired about why she had not
received two commissions, where a patient had tested twice, stating: Yes, there were 2 disks. It
is always a good idea to send multiple disks as it greatly reduces the chances of getting a blank
one, and as a result, it decreases the need for retests. For this patient, though, we analyzed only
one night (the one with more evidence of sleep apnea/higher RDI) as the insurance would not
cover multiple tests. That email was also sent to Raviv. According to the lab director, when
SNAP does this, SNAP does not inform the referring provider of the raw results (i.e. the
preliminary RDI) for the unprocessed nights of testing.
87. Therefore, even as SNAP made two claims for two tests the default for each
Medicare beneficiary in October 2010, SNAP routinely analyzedand continues to analyzea
single nights test and produce a single report scoring the patients sleep apnea for many non-
Medicare beneficiaries.
88. In fact, even where one test already had been scored, when SNAP learned that a
patient was covered by Medicare, SNAP analyzed a second test unnecessarily and claimed that
second unnecessary test to Medicare. For example, in June 2015, Gil Raviv was emailed by an
account specialist and asked how many nights to process and bill for a self-pay patient, i.e. a
25
patient without insurance. He answered: please put in notes and state 1 night. A few days later
the account specialist emailed Raviv and the lab director and informed them that the referring
provider had telephoned and informed her that the patient was not self-pay but instead had
Medicare. The lab director then followed up, emailing one of her technicians as well as Gil Raviv,
and instructed her technician to please score night A as well (you already scored B). The lab
directors instruction to order analysis of two reports for this patient instead of one was because
the patient had Medicare and that was the rule at SNAP, as set by Gil Raviv.
89. The fact that only one test is necessary to diagnose OSA is made further clear by
how SNAP treated Medicare beneficiaries when they were providers or providers staff, receiving
the test as part of SNAPs marketing pitch. When a providers staff member was selected for an
offices first test at a SNAP lunch & learn marketing pitch session and that individual was a
Medicare beneficiary, SNAP would have only one test analyzed and one claim billed. It did so
because SNAP was aware that, unlike for private pay patients, it could not waive a copay for a
Medicare patient, under Medicares rules. Therefore, in order to keep the copay costs down for
that staff member as part of its marketing strategy, it submitted only one claim to Medicare and
issued one report.
90. Burton explained the policy as follows, on October 14, 2014, in an email to a
territory manager, copying Gil Raviv, the lab director, the accounting director, and others: we
will never release more than one night for the first test with a medicare patient who does not have
secondary insurance and so the OOP [out of pocket] for the first test will only be $44 for the first
test medicare patient who does not have secondary insurance. . . . [Y]ou are correct that the
medicare typical max OOP is $87, when they are not the first test.
91. This practice of processing and claiming only one test when it was good marketing
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strategy for SNAP further shows that its practice of routinely analyzing and claiming two or more
tests for each Medicare beneficiary was not based upon medically necessity.
3. SNAP Increases Its Requirement to Three Nights of Testing.
92. Only a few months after increasing its requirement to two tests from its
longstanding one test protocol, SNAP moved to a three-test requirement.
93. On March 2, 2011, SNAPs Director of National Sales emailed its territory
managers, with a copy to Gil Raviv as well as SNAPs accounting director, and informed them of
the change. In conjunction with another challenge, i.e. bonus opportunity for the territory
managers, he wrote:
94. In response to that email, several TMs expressed a concern that patient copays
would increase. National Sales Manager Leslie Gardea sent an email to all of the territory
managers, responding to this concern: Apparently, the email traffic generated the question from
several people as to whether the patient will pay a higher out of pocket once Gil announces 3 night
testing. The answer is NO!! The doctor will still get the best report out of the 3 nights or in some
cases he may receive multiple reports.
95. Once again, SNAPs stated reason for increase in testing focused on eliminating
blank tests and avoiding retesting, and the message to TMs was that SNAP was looking for the
best report out of the 3 nights. This was not true, at least for federal program beneficiaries. In
reality, SNAP was not avoiding blanks but was analyzing and claiming multiple tests per
27
beneficiary.
96. The real reason for the increase in required nights of testing was to boost SNAPs
profitability, as Raviv stated to his daughter just days later. SNAPs top territory manager,
Ayelette Raviv, Gil Ravivs daughter, sent her father an email on March 4, 2011, after learning of
SNAPs changed protocol to require three nights of testing.
97. In that email, she stated that SNAP should not require patients to test for more than
one night, and that only one night of testing is necessary, writing:
I am not sure that making 3 night testing a requirement is a good

idea at the moment. I think that our strength is flexibility- we
encourage 3 nights, but we can do two, or even one night. This was
a selling point against sleep solutions, and I think that it is still a
good point and keeps us competitive with sleep labs. We are even
more competitive because although we only need one night, our
patients can comfortably and inexpensively test for 3 nights! With
sleep labs the number of nights is limited due to cost and strategic
issues. With other home tests such as sleep solutions the patient is
forced to do 3 nights because their sub par analysis requires it. Some
physicians and patients see the benefits of 3 nights, but for others
one night is painful and disturbing enough. Right now we can
provide good service for both ends of the spectrum. I think that it is
a good idea to encourage 3 nights, and even start all new accounts
with multi-night testing- but to hold off on making 3 night testing a
requirement. If you implement this too quickly it could backfire.
98. Gil Raviv responded by email later the same day: It is very important to us to move
to 3 nights as it will improve significantly our profitability and strength, but I agree that we should
do it not too aggressively. Do you think that sending the following FAX to all our customers is too
harsh?
99. Meanwhile, at trainings for new or prospective territory managers, Gardea taught
these contractors to make sure that Medicare patients are tested for three nights because, if they
did so, SNAP would submit claims for, and pay commissions to the sales representatives for, all
three nights of testing in some circumstances. At the trainings, Burton likewise informed the new
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TMs that SNAP wanted patients to wear the sleep testing equipment for three nights and noted that
insurance carriers (including Medicare) would pay for multiple nights of testing.
100. Territory managers generally followed their training and communicated the
message to the referring physicians that patients were to take multi-night tests and wear a recorder
for three nights. The referring providers generally did not have specialized training in sleep
medicine and thus did not have an independent awareness of how much sleep data was necessary
to diagnose OSA.
101. Not only did territory managers instruct the physicians offices to have their
patients record three nights of sleep data, but in many instances SNAP representatives themselves
communicated with the referred patients and gave them that instruction directly. Until recently,
SNAP held apnea clinics, where the providers office would schedule patients to come in at a
particular time, and the TM would train them, one by one, on how to use the device. At apnea
clinics, TMs told the patients to record three nights of data.
102. Since March 2011, SNAP has pushed three nights of testing and routinely claimed
multiple home sleep diagnostic tests per beneficiary to federal programs, despite knowing that only
one test was medically necessary to diagnose OSA. For example, on March 25, 2011, an
administrative staff member asked the accounting director, with a copy to the lab director and Gil
Raviv, to verify multi-night on a federal employee health benefit Blue Cross/Blue Shield
beneficiary who had recorded three nights of sleep. The accounting director replied all and stated
[p]lease do all.
103. In May 2011, a SNAP lab technician emailed Gil Raviv, with copies to the lab
director and accounting director, along with others, and informed him, These are the Medicare
multi nights from today. Please tell us how many of each to process[.] The email then listed six
29
patients by account number and provided information on whether their Medicare was primary or
secondary, but no substantive information about their clinical condition. The email identified five
of the patients as having sent two nights of data and one as having sent three nights of data. Gil
Raviv directed the lab technician to process all of the tests. In SNAPs business operation, this
meant that claims would be submitted for each test processed. SNAPs lab director then responded
that in offloading data, she found out that for the first patient, there are actually 3 nights-still
do only 2? and Raviv responded that the first patient was corrected to 3[,] meaning that three
tests should be processed and claimed for that patient.
104. At the same time, SNAP was analyzing one night and producing one report where
there was no financial incentive to do more. SNAP had arrangements it called capitated accounts
as well as other relationships called flex-service agreements. In both of those arrangements,
SNAP processed only one test and provided one diagnostic report for each patient.
105. This shift to three nights of testing for the sake of profitability appeared to work.
On April 4, 2011, Gil Raviv emailed two of the companys investors and said, [a]s you can see
we had a sharp increase in tests during March where we increased the number of tests from 456 in
March 2010 to 760 in March 2011, which is actually slightly ahead of the projections I gave you.
16% of this growth came from increasing the number of patients tested and the remaining from
multi-night testing. I expect the trend to continue in April (when compared with April 2010)
Note that for breaking even on any given month we need to cross the 850 tests/month.
106. SNAPs increase in profitability was based in part upon inflated and fraudulent
Medicare and other federal program payments. SNAPs practice of unnecessarily double- or
triple-testing beneficiaries in order to diagnose OSA meant that federal program payments per
beneficiary to SNAP immediately skyrocketed. In 2010, Medicare paid SNAP approximately
30
$7000 in total for its beneficiaries second-night tests and $700 in total for its beneficiaries third
tests. The following year, Medicare paid SNAP approximately $99,000 in total for its
beneficiaries second night tests and nearly $19,000 for third tests for its beneficiaries. These
claims for additional tests done as a matter of course were false and fraudulent. The MACs did
not have a system flag or edit in place to alert the Medicare program to this practice.
107. At some point after changing the protocol to require three nights of testing, SNAP
created an order form that included a preprinted, preselected statement of the Test Ordered as
Sleep Apnea x3, as shown below:
108. Physicians sometimes used the above preprinted form when referring patients for a
SNAP test. In other instances, physicians sent an electronic referral that had no reference to
multiple testing, even in the vague manner of the preprinted form above. In still other instances,
providers used a different form, titled SNAP Diagnostic Physician Order form, which did not
state a number of nights and instead concluded with this statement: Given a history and physical
findings suggesting a sleep disorder, I am referring this patient for evaluation using the SNAP
Diagnostics System. This test and interpretation is medically necessary to obtain information
which will assist in the diagnosis and treatment of this patient.
109. Some providers complained to SNAP about the fact that SNAP required multiple
31
nights of testing but then provided the physician with fewer reports than tests submitted. Burton
fielded some of these complaints. In response, when Burton explained SNAPs system to those
providers, he made clear that multi-night testing was not medically necessary in most cases, but
he did not tell them that the nights SNAP analyzed were selected based on which had the highest
preliminary RDI.
110. For example, in response to the question from the office manager of one of SNAPs
most prolific referring providers, asking why they regularly received one report back after a patient
tests for multiple nights, Burton wrote, in relevant part, on August 7, 2014: We can test for as
many night [sic] as we wish with any insurance plan. Multi-night testing is very important, because
as many as one third of patients tested can be within normal limits on night one but demonstrate
mild, moderate and sometimes even severe sleep apnea on nights 2 or 3. When we release a test
report, all insurance plans consider that a full service for which we must bill.
111. Burton then made clear why SNAPs routine billing of two and three nights for
federal program beneficiaries is fraudulent: For the vast majority of patients releasing all three
nights would not provide any more clinical value than one night. Yet the price to the patient would
be three times more (often all falling on their deductible). That is why we always evaluate each
night to determine which is the most clinically relevant for that patient before making the decision
on which night to release. Sometimes there are important differences that force the release of
multiple reports. Yet, often there is no value to releasing multiple nights as the data are consistent.
It would simply cost more.
112. SNAP pushed three nights of testing and routinely claimed multiple tests to federal
programs for years, despite knowing that only one test was medically necessary to diagnose OSA.
On June 3, 2015, a referring providers office emailed Ayelette Raviv (Gil Ravivs daughter and
32
SNAPs top sales representative) and said we would like to discuss testing duration and whether
3 nights are needed or if we can scale back to 1-2 nights. Ayelette Raviv replied by email the
next day and stated: In terms of multi-night testing, only one night is necessary. The reason to
test for more is simply as no two nights of sleep are the same and to minimize the need for a retest
if the patient struggled on the first night.
113. As a result of SNAPs false and fraudulent claims, Medicare paid SNAP
approximately $3.7 million for medically unnecessary double and triple home sleep tests. SNAP
likewise defrauded other federal health programs for medically unnecessary double and triple
home sleep tests.
4. Examples of Fraudulent Claims for Unnecessary Multiple Tests
114. Medicare Patient A was the first patient in the email described above in paragraph
103. Medicare and Patient A were unnecessarily billed for three nights of home sleep testing,
through three claims to Medicare using HCPCS code G0399, for service dates May 17, 18, and
19, 2011. Medicare paid SNAP approximately $173 for each of these claims, including for the
medically unnecessary second and third nights of testing.
115. Patient B was the sixth patient in the email described above in paragraph 103.
Medicare and Patient B were unnecessarily billed for three nights of home sleep testing, through
three claims to Medicare using HCPCS code G0399, for service dates May 4, 5, and 6, 2011.
Medicare paid SNAP approximately $173 for each of these claims, including for the medically
unnecessary second and third nights of testing.
116. Patient C was the Medicare patient referenced in the June 2015 email thread.
Medicare and Patient C were unnecessarily billing for two nights of testing, through four claims
to Medicare using HCPCS code G0399, with modifiers, for service dates June 8 and 9, 2015.
33
Medicare paid SNAP approximately $173 per test, including for the medically unnecessary second
night of testing.
117. Patient D was referred to SNAP by her physician with a Physician Order form that
did not reference multiple night testing. SNAP billed Medicare and Patient D unnecessarily for
two nights of home sleep testing, which were claimed to Medicare using HCPCS code G0399, for
service dates July 15 and 17, 2015. Medicare paid SNAP approximately $173 for each of these
tests, including for the medically unnecessary second night of testing.
118. Patient E was referred to SNAP by his provider through an electronic referral did
not reference multiple night testing. Despite this, SNAP billed Medicare and Patient E
unnecessarily for two nights of testing, through four claims to Medicare using HCPCS code
G0399, for service dates April 18 and 19, 2015. The providers files only contain reports from
SNAP for a single test with the date of service of April 18, 2015. Medicare paid SNAP
approximately $175 for each of the two testing dates submitted, including for the medically
unnecessary second night of testing.
119. Patient F was referred to SNAP by his provider through an electronic referral that
did not reference multiple night testing. Despite this, SNAP billed Medicare unnecessarily for two
nights of testing, which were claimed to Medicare using HCPCS code G0399, with service dates
September 27 and 29, 2014. Patient Fs medical records reflect that a SNAP representative
communicated with the provider on September 15, 2014 and told her that SNAP need[ed] to
charge patient about 87 dollars for the testing after the Medicare coverage. That amount is the
total copay for two tests, in accordance with SNAPs practice of routinely claiming two tests per
Medicare referral, although no notes in the file indicate that SNAP informed the provider that it
was charging for two tests, and the provider stated that she was not aware of this practice. The
34
provider requested and received a waiver of this copay amount for Patient F due to the patients
indigency. However, Medicare paid SNAP approximately $175 for each of these tests, including
for the medically unnecessary second night of testing.
B. SNAPS Unlawful Kickback Schemes
120. SNAP Diagnostics engaged in multiple kickback schemes in order to increase its
referrals for home sleep testing and the resulting claims and reimbursements for those services.
1. SNAP Offered Referring Providers the Professional Component, or

Interpretation, Billing as an Unlawful Inducement to Refer Patients.
121. SNAPs marketing pitch to physicians focused on revenue that a physician could
earn referring patients to SNAPs home sleep testing instead of to a polysomnography lab. An
excerpt from one of SNAPs marketing tools for showing physician revenue, called Managing
Patients with Sleep Apnea shows SNAPs estimate of the revenue a physician can garner for the
codes that SNAP suggests billing:
122. Some of SNAPs revenue pitch regarded incidental and benign benefits, like billing
for an office visit for seeing the patient, but some of the pitch was an offer of kickbacks. The most
35
pervasive kickback involved SNAP offering and encouraging referring physicians to bill for the
professional component of the test, although SNAP physicians were performing the professional
component. The referring physicians were, therefore, billing CPT 95806 -26 and deriving revenue
for work performed by SNAP physicians.
123. SNAP employs physicians who are board certified in sleep medicine. SNAP calls
them reading physicians, and they interpret the results of home sleep tests. SNAPs reading
physicians have remote access to the SNAP lab system, including the raw data and analysis for the
test being interpreted by that physician.
124. For Medicare patients, SNAP bills under the code, G0399, for its service, including
both the technical aspect and the interpretation (also known as the professional component).
Private insurance and the federal employee health benefit plans use CPT code 95806 for the same
service. Like the G0399 code, 95806 can be broken into its technical component (-TC) and
professional component (-26), and billed in separate claims.
125. In pitching physicians to refer business to SNAP, territory managers are trained to,
and do, tell physicians that they can bill private insurance for the professional component, or
interpretation, of the SNAP home sleep test. This is because many private insurers, unlike
Medicare, do not have the same educational or certification requirements for physician claiming
home sleep testing services.
126. TMs routinely made this proposal, despite the fact that the referring physicians
generally did not know how to interpret home sleep test data or score test results for sleep apnea.
Therefore, SNAP prepared an interpretation report, including the sleep apnea RDI score, and
provided the referring physician with an unsigned interpretation report. SNAP told the referring
physician it would not bill for the professional component, only the technical component, and
36
encouraged the referring physician to bill for the professional component, although he or she had
not provided the service.
127. Stephen Burton described this business model of offering physicians the ability
to bill for the interpretation of the sleep test in a recorded meeting in which he was attempting
to solicit new independent sales representatives. Burton said, regarding the referring physicians,
they get revenue, we get revenue by the technical, and basically the fact that they can get revenue
drives the volume[.]
128. In that conversation, Burton explained that, for private insurance patients, SNAP
has its own board-certified sleep physicians prepare a report from the test results, which includes
the sleep apnea RDI score. That report by SNAPs board-certified doctor is then given, unsigned,
to the referring physician. SNAP also provides a cross-reference index that associates the numeric
score of the results with the words mild, moderate, or severe apnea. As Burton explains,
the SNAP pitch is that the referring provider writes that word at the end of the SNAP-prepared
report, signs it, and then bills private insurers for the interpretation under CPT code 95806 -26.
SNAP then bills the technical component, or CPT 95806 TC, for each of those tests.
129. With respect to Medicare patients, Burton stated in that conversation that since
Medicare requires the interpreting physician to be sleep medicine certified, most referring
physicians are not able to do the interpretation for Medicare patients. Burton stated that, the good
news is that we make more money on that test. He further stated that he never mentions in his
pitch that the physician cannot bill the professional component for Medicare patients, though,
because then the doctors reaction is, oh my god, half of my patients are Medicare, Im not going
to do this.
130. One of the individuals to whom Burton was describing this business model
37
expressed concern that the referring physicians would be uncomfortable with the idea of
handling the interpretation, because they would not know how. Burton stated: every single test
is scored by our sleep guy and its looked at by our doctor. So all theyre doing is basically
agreeing with our doctor whos already read it . . . . So almost everybody is comfortable there.
131. During the meeting, Burton was asked, [w]hat is the professional component?
He responded, [i]ts interpreting the test but we never use those words . . . Because the doctor
thinks oh my God. Burton explained, that is why we do not use the word interpret. He gets paid
for doing the professional component, and thats the way we word it. He further stated that what
the referring providers have to do takes two seconds.
132. When asked during this conversation how SNAP can compete in the New York
City market, where labs often pay rental fees for space in doctors offices, Burton answered: We,
for us, the doctors making the money off the professional component . . . . So theyreso we
dont have to pay, because weve given them, were giving them . . . a billing.
133. Gil Raviv described this business model similarly in a February 28, 2012 email to
the Managing Director of a venture capital fund: In our proven business model, we consign the
physicians the recorder, we provide them the kits and we analyze the data at no charge to the Dr
office. We only charge the insurance company and the patient, for his portion of the technical
component of the test. The Dr charges the insurance company for the professional component of
the test. Therefore, the Dr makes $150/test, on average, for only a few minutes of work of his nurse
and a minute or two of work for himself and retains control on his/her patient while having to
invest nothing. (emphasis added).
134. Ravivs email to the venture capital fund went on to extol the success of this
business model: Consequently, it is quite easy to convince the physicians to join us, and to have
38
a closing rate of 80% or more. That said, as we want to weed out the offices which are not
committed we ask them to setup first at least 1 patient who needs testing prior to us consigning a
unit to them. That happens successfully in about 50% of the Dr offices we visit. Of those about
half (25%) will become long term customers with test volume greater than 2-4 tests/month while
about 25% will provide less tests per month. Those that have too low of a volume we convert to a
drop ship account where we ship the testing unit directly to the patient's home upon referral from
the office and remove the underutilize recorder from the Dr office. Therefore, the overall closing
rate is about 35%.
135. This business model relies on the offering of kickbacks. SNAP provides a report
scored by its own sleep medicine doctor so that the referring physician can invest nothing but
still bill for an interpretation they do not do and would not be qualified (in most cases) to do. Once
the physician signs the report, he or she improperly bills for a service that was done by SNAP.
SNAP allows physicians to bill in this manner instead of submitting a global claim for the service
SNAP has provided because it drives the volume of SNAPs business. Not only that, it increases
SNAPs Medicare test volume, i.e. the tests for which SNAP gets to bill globally and makes more
money on, according to Burton.
136. SNAPs suggestion that the physician write the word mild, moderate, or
severe on the unsigned report is wholly frivolous. As DME coverage requirements make clear,
the RDI score on the report largely determines the eligibility for treatment, and no statement that
the sleep apnea is severe is required. SNAP presumably pitches this unnecessary step to make
physicians feel as if they have done something material in order to bill for the service, when they
have not.
137. Stephen Burton not only trained territory managers in marketing this inducement,
39
but he directly marketed it himself. However, in some of his own pitches, he candidly stated that
the providers work to bill for the professional component is report review, i.e. reviewing the
SNAP physicians report. In an April 18, 2014 email to a cardiologist in the state of New York,
Burton pitched the provider with the financial benefits of referring home sleep services to SNAP.
Noting that the provider had a 50% Medicare, 25% Medicaid, and 25% commercial patient mix,
Burton provided him with a proforma of Projected Practice Revenue. This document
estimated the provider would garner revenue of $100 per patient for billing CPT code 95806,
modifier 26, for the Professional Component, which the document described as report review.
138. SNAPs reading physicians on occasion have signed the interpretation reports for
private insurance patients. In one such instance, in December 2010, Ayelette Raviv emailed Gil
Raviv regarding some tests that had been done for one of her territorys practices. She asked him
to [p]lease send them another report without [Dr.] Lisa [Shives]s signature, this is bcbs not
Medicare and they can bill for it. Shives is one of SNAPs reading physicians.
139. SNAP also prepares a CPAP initial pressure recommendation, or titration, as part
of its service. This recommendation often is provided as part of the original interpretation report,
but oftenwhen SNAP receives the neck circumference information, which is required for this
recommendation, laterit is provided as an addendum. This initial CPAP pressure
recommendation is required for a DME company to provide the patients CPAP.
140. On its face, the CPAP pressure recommendation addendum is the work of a SNAP
reading physician, as it is signed with the typed name of the reading physician. SNAP provides
this CPAP initiation report or addendum for all patients, regardless of whether SNAP or the
referring physician billed for the professional component.
141. This professional component incentive was, according to SNAP, financial
40
compensation from SNAP. In a March 19, 2012 email exchange between SNAPs Director of
National Sales and the office manager of a physicians group practice that SNAP was pitching, the
office manager asked, among other questions, Is there any financial compensation from Snap
Diagnostics? SNAP answered: A. SNAP is reimbursed by billing the patients insurance for the
Technical component[.] The physician office receives reimbursement for billing the patient's
insurance professional component[.]
142. On December 3, 2014, Stephen Burton informed Gil Raviv, with copies to SNAPs
reading physicians, that many providers express discomfort with the interpretation word.
Therefore, Burton proposed changing the title of the interpretation reports that physicians were
signing to Professional Findings in order not to scare off those physicians from billing for the
professional component of home sleep testing. Raviv, upon the advice of Dr. Lisa Shives,
decided to keep the report an interpretation.
143. On May 12, 2015, Burton emailed with a territory manager (on a communication
that included Raviv and Gardea) to advise the TM how to pitch SNAPs business against a
competitors business. Burton highlighted two significant differences between SNAP and the
competitor. The first difference he identified was that SNAP gives the referring physician the
professional component billing, stating: we let them keep the practice revenue for the professional
component when insurance allows. This email makes it clear that, (1) SNAP offered the ability
to bill for the interpretation of the test as a way to secure referrals from physicians, (2) this service
was a monetary value to the physician and a perk of making referrals to SNAP, and, (3) it was
something that (at least some of) SNAPs competitors did not do.
144. However, where the professional component billing would not be effective as an
inducement and might raise a red flag, Burton changed the pitch. On March 29, 2015, when a
41
territory manager asked about how to get business from a particular new referring provider, a group
practice with doctors paid by a hospital, Burton stated: if they are a hospital-based physician
practice we should make one adjustment. the docs are likely paid on salary. so practice revenue
may not be the same importance or priority that it is with independent physicians. i would suggest
we DO NOT guide the providers to bill the professional component for the sleep test (CPT:
95806-26). if they do not bill this code they are less likely to hit the radar of the hospital financial
admins. the other codes are more in line with customary and normal office activities and will not
raise red flags by hospital finance team.
145. While this pitch was effective and many physicians became referrers to SNAP and
billed for interpretation that they did not do nor were they qualified to do, some providers
questioned the legitimacy of this practice. In May 2015, Gardea emailed an administrative staff
member at a cardiology practice in Texas, pitching the practices ability to bill the CPT code 95806
with modifier 26 for non-Medicare sleep tests. The administrative staff member relayed the
practice managers question, asking how the doctor could be qualified to bill for the sleep studies
professional component. In a follow-up email the practices manager wrote Gardea and asked
how can our doctor write in their interpretation if they dont know how to interpret sleep studies?
He asked, [d]o you have an opinion from CMS or OIG that you could share? His email ended
with the statement: [a]t this point, its just not passing the smell test for us.
146. Gardea subsequently provided him by email SNAPs Medicare contract and its
JHACO accreditation. The practice managers concerns were not allayed. He wrote: So I see
youre accredited and have a Medicare billing number but it still does not answer our question as
to how we can bill for something our physicians are not doing nor qualified to do. Because the
practice manager never received a satisfactory answer to that question, the practice never referred
42
business to SNAP.
147. Likewise, in September 2014, a physician who had received the usual SNAP pitch
from the territory manager rejected the offer by SNAP for him to bill the professional component.
On September 3, 2014, Burtons calendar reflected a call with that doctor, who said it was
unethical for us to allow the Dr. to bill the professional component. He said it was like a kickback.
Thereafter, according to the physician, he refused to bill for the professional component and
subsequently began to use a competitor of SNAP, because he believed the SNAP arrangement
was not an ethical arrangement.
148. SNAP intended that its work, in scoring each test and providing the report to
physicians but not billing the global code and instead allowing the referring physician to bill
private insurance for the professional component, would induce referrals of all the physicians
home sleep testing services. Therefore, every single professional component billed by a referring
physician, where SNAP physicians actually did the work, represents a violation of the kickback
statute. As this was SNAPs business model and general marketing strategy, every single claim
by SNAP for a home sleep test for a Medicare beneficiary was a false claim, because it resulted
from a violation of the Anti-Kickback Statute.
2. SNAP Provided Kickbacks to Independent Sales Representatives in the

Form of Commissions and Bonuses.
149. SNAP provided other types of kickbacks as well. Its territory managers were, until
very recently, independent contractors who were paid a commission for each test referred, claimed,
and paid for patients referred by the physicians to whom the TMs marketed. The TMs also
received bonuses in certain circumstances, like meeting test sales volume targets.
150. SNAP paid its territory managers different commission amounts based on whether
the patient referred had private insurance or Medicare. For example, the following independent
43
contractor agreement between SNAP and a territory manager executed in 2014, explains the
commission structure:
151. For the first night, a billable test warrants a commission, because first nights
tests are expected to be paid. Where tests are for night two and night three, the agreement makes
clear that the contractor is paid only when and if Company is paid[,] reflecting SNAPs
uncertainty in those claims being payable. As reflected in the agreement, and in other SNAP sales
and marketing documents as well as internal emails, SNAP territory managers received the
commission on tests only if the claims were paid.
152. SNAPs independent contractor agreements lesser valuation of the second and
third nights of testing as part of the multi-night test commission is not based upon any actual
lesser value of additional tests provided to and claimed for Medicare beneficiaries. Medicare
reimburses at the same amount for each test claimed. It does not pay for a multi-night test, nor
is reimbursement reduced for multiple diagnostic tests, which it does not expect in the normal
course.
153. However, SNAP gave bonuses to incentivize its sales force to sell what it called
multi-night testing to providers and their patients. For example, on June 1, 2011, SNAPs Director
44
of National Sales emailed territory managers to tell them, Gil has just approved our new
challenge. . ..
154. SNAPs arrangement with its independent contractor health care sales
representatives has many characteristics that HHS-OIG has identified as raising particular fraud
and abuse concerns in HHS-OIG Adv. Op. 98-10 (Aug. 31, 1998). Specifically, HHS-OIG has
identified several characteristics of arrangements among sellers, sales agents, and purchasers that
appear to be associated with an increased potential for program abuse.
155. These suspect characteristics include, but are not limited to, (1) compensation based
upon the volume or value of referrals, (2) the direct billing of a federal health care program by the
seller for the item or service sold by the sales agent; (3) direct contact between the sales agent and
physicians in a position to order items or services that are then paid for by a federal health care
program; (4) direct contact between the sales agent and federal health care program beneficiaries;
and (5) the marketing of items or services that are separately reimbursable by a federal health care
program.
156. Through SNAPs per-test commissions, as well as bonuses for multi-night testing,
SNAP incentivized its independent contractor territory managers to push sales of medically
unnecessary second and third nights of tests, which caused false claims to be submitted. The
remuneration paid to the independent contractor territory managers was made to induce referrals
of federal health care program beneficiaries. Because the independent contractor territory
45
managers were paid per test, they were paid directly based on the volume or value of the sleep test
referrals to SNAP from physicians to whom they marketed. No exception or safe harbor applies.
This was an impermissible kickback arrangement, and because kickbacks were paid on every
SNAP test sold, all of the Medicare payments to SNAP were paid as a result of false claims.
3. SNAP Gave Free or No Copay Tests to Referring Providers, Their Families,

and Key Staff Members, to Induce the Referral of Patients.
157. SNAPs business model also included kickbacks in the form of free or no copay
sleep testing services for referring physicians, their family, physicians office staff and their
family. SNAPs marketing protocol included the requirement that territory managers, at the initial
lunch & learn, identify a staff member (family member) to do the first test so we can demonstrate
the billing process. We know our device is simple to use but we want someone here to benefit from
the first test so they can let you know how easy it is to use. (Its a perk that we offer at the lunch
for a staff member).
158. As a result, SNAP provided free or no copay tests in order to acquire that providers
business and make sure that key office staff facilitate SNAPs flow of business. The purpose of
giving a first free test to a provider or their staff or family member was to find a champion in the
office, according to an October 1, 2014 email exchange between Burton and Gardea, copying
Raviv.
159. In furtherance of that goal, when the no copay first test was for a referring doctor,
SNAPs rule was to do all bill one. This meant SNAP would submit only one insurance claim,
but would analyze three tests and give the physician all three reports. In other circumstances,
SNAP would not analyze tests or provide reports where they were not submitting a claim for that
service. Therefore, do all bill one meant SNAP was giving referring physicians free services
services SNAP internally valued at $1100 per testthat it did not give other patients.
46
160. For example, in March 2015, a SNAP referring physician ordered her own home
sleep test, such that her insurer would not cover it. As reflected in an email exchange spanning
from March 26 to 31, 2015, involving Gil Raviv, the lab director, and others, SNAP determined it
would give the referring physician the test for free, since the account has good potential for us.
Because it was SNAPs practice to do all bill one where the patient was a referring physician,
Raviv instructed the lab director to have SNAP give the referring physician three free test analyses
and reports.
161. SNAP was careful to make sure its territory managers did not give away these
valuable services without a business benefit. As Gardea described, in an email to Raviv and Burton
regarding the guidance she had given a territory manager who was struggling with closing the deal
on the first test offer strategy. On August 12, 2015, Gardea wrote: [s]he is like many TM's
where they jump on the first person that says they need a sleep study[.] I suggested that she not
offer the NOOP test to the first person that volunteers. Tell them you have something special for
a staff member but then talk about symptoms to the point where everyone thinks they have sleep
apnea . . . then chose the person that is most valuable to Snap (MA, OM, NP) and not necessarily
the MAs husband. We also talked about holding out for a staff member (family member) rather
than defaulting to a patient.
162. SNAP gave entirely free tests to referring physicians and their family members,
without even submitting any claim to their insurance when that was the physicians preference and
it was necessary to get the physicians referrals. For example, on November 25, 2014, Gardea
explained in an email to an inquiring lab technician why two free tests were in the system. She
said that a physician and his wife had taken tests, which SNAP had offered with no out of pocket,
but then the physician demanded the tests for free, saying that he was going to give her all his
47
sleep tests so he wanted his for free. Gardea approved processing the tests because the doctor
was giving SNAP additional patients so we decided not to make him upset[.]
163. Similarly, on November 13, 2014, Gardea informed Raviv and Burton by email
that, at the request of the territory manager handling a providers account, Gardea had waived the
out-of-pocket costs for home sleep testing services provided to that referring providers nurses
husband because she was a key staff member in dispensing the snap test.
4. Examples of False Claims Resulting From Violations of Anti-Kickback

Statute
164. Patient G is a Medicare beneficiary. SNAP submitted four claims to Medicare for
Patient G, under codes G0399, with modifiers, for home sleep testing services on April 29 and 30,
2014. SNAP claimed $230 in services per date, for a total of $460 in services. Medicare
reimbursed SNAP approximately $346 dollars, or $173, for each date of service for Patient G. The
referral and payment of those services to SNAP resulted in two commissions paid to the
independent contractor territory manager for the sale or marketing of each of the two home sleep
tests, including the medically unnecessary second test. These four claims were false claims, as
they were the result of a violation of the Anti-Kickback Statute.
165. Patient H is a Medicare beneficiary. SNAP submitted four claims to Medicare for
Patient H, under codes G0399, with modifiers, for home sleep testing services on May 23 and 24,
reimbursed SNAP approximately $346 dollars, or $173, for each date of service for Patient H. The
referral and payment of those services to SNAP resulted in two commissions paid to the
independent contractor territory manager for the sale or marketing of each of the two home sleep
tests, including the medically unnecessary second test. These four claims were false claims as they
were the result of violations of the Anti-Kickback Statute.
48
166. Patient I is a Medicare beneficiary. SNAP submitted four claims to Medicare for
Patient I, under codes G0399, with modifiers, for home sleep testing services on October 31, and
November 1, 2015. SNAP claimed $230 in services per date, for a total of $460 in services.
Medicare reimbursed SNAP approximately $346 dollars, or $173, for each date of service for
Patient I. Patient I was referred to SNAP by a provider who had been marketed to by a SNAP
independent contractor territory manager. The marketing included the pitch that the provider could
bill for the professional component for privately insured patients, although SNAP provided the
report scoring patient results, for that provider to sign. That provider regularly reviews the SNAP-
provided reports, signs them, and bills for the professional component. Accordingly, the four
claims submitted by SNAP for services to Patient I were false claims as they resulted from
violations of the Anti-Kickback Statute.
167. Patient J is a Medicare beneficiary. SNAP submitted four claims to Medicare for
Patient J, under codes G0399, with modifiers, for home sleep testing services on July 11 and 12,
reimbursed SNAP approximately $346 dollars, or $173 for each date of service, for Patient J. The
provider who referred Patient J to SNAP had received direct marketing by Stephen Burton, by
email on April 18, 2014, as described above in paragraph 137. The provider thereafter referred
Patient J and others to SNAP. SNAP gave unsigned interpretation reports to Patient Js provider
for his other, non-Medicare referred patients. Accordingly, the four claims submitted by SNAP
for services to Patient J were false claims as they resulted from violations of the Anti-Kickback
Statute.
168. Patient K is a Medicare beneficiary. SNAP submitted four claims to Medicare for
Patient J, under codes G0399, with modifiers, for home sleep testing services on March 4 and 5,
49
reimbursed SNAP approximately $348 dollars, or $174 for each date of service, for Patient K.
Patient K was referred to SNAP by a provider who had been marketed to by a SNAP independent
contractor territory manager. The marketing included that the provider could bill for the
professional component for privately insured patients, although SNAP provided the report scoring
patient results, for that provider to sign. That provider regularly reviews the SNAP-provided
reports, signs them, and bills for the professional component. Accordingly, the four claims
submitted by SNAP for services to Patient K were false claims as they resulted from violations of
the Anti-Kickback Statute.
169. Patient L is a Medicare beneficiary. SNAP submitted four claims to Medicare for
Patient L, under codes G0399, with modifiers, for home sleep testing services on May 13 and 14,
reimbursed SNAP approximately $346 dollars, or $173 for each date of service, for Patient L.
Patient L was referred to SNAP by a provider who had been marketed to by a SNAP independent
contractor territory manager. The marketing included that the provider could bill for the
professional component for privately insured patients, although SNAP provided the report scoring
patient results, for that provider to sign. That provider regularly reviews the SNAP-provided
reports, signs them, and bills for the professional component. Accordingly, the four claims
submitted by SNAP for services to Patient L were false claims as they resulted from violations of
the Anti-Kickback Statute.
50
Count I
Violations of the False Claims Act

(31 U.S.C. 3729(a)(1)(2006), and, as amended, 31 U.S.C. 3729(a)(1)(A))
Causing False Claims to Be Presented
As to All Defendants
170. The United States incorporates by reference paragraphs 1 through 169 as if fully set
forth in this paragraph.
171. As set forth above, defendants knowingly or with deliberate ignorance or reckless
disregard for the truth, presented, or caused to be presented, to an officer, employee, or agent of the
United States, or a contractor thereof, false or fraudulent claims that were paid with federal funds.
Those claims were false or fraudulent because they were for services that were not medically
necessary and were, for that reason and others, in violation of applicable Medicare requirements.
172. Defendants fraudulent conduct caused false claims to be presented to Medicare
contractors for payments of federal funds.
173. The United States made payments to SNAP because of the false or fraudulent claims
caused by defendants.
174. Pursuant to the False Claims Act, the defendants are liable to the United States under
the treble-damage and civil-penalty provisions of the False Claims Act for a civil penalty of not less
than $5,500 and not more than $11,000 for each of the false or fraudulent claims herein, and for
violations of the FCA after November 2, 2015, a civil penalty of not less than $10,781 and not more
than $21,563, plus three times the amount of damages that the United States has sustained because
of the defendants actions.
51
Count II

(31 U.S.C. 3729(a)(2)(2006), and, as amended, 31 U.S.C. 3729(a)(1)(B))
Use of False Statements
disregard of the truth, made, used, and caused to be made and used, false records and statements
material to false or fraudulent claims in connection with their claims for payment of federal funds
for home sleep testing services.
177. Defendants made and/or caused to be made numerous false records and statements,
including false statements in claim forms that the claim complies with, all applicable laws,
regulations, and program instructions for payment, including but not limited to the Federal anti-
kickback statute, and that the services were medically necessary. As a result of these false records
and statements, false claims for payment were submitted to Medicare contractors by SNAP
Diagnostics, LLC.
178. The United States paid such false or fraudulent claims because of the acts and conduct
of defendants.
179. By reason of defendants false statements and false claims, the United States has
been damaged in a substantial amount to be determined at trial.
52
Count III

(31 U.S.C. 3729(a)(2)(2006), and, as amended, 31 U.S.C. 3729(a)(1)(B))
Causing False Claims to Presented for Services Rendered as a Result of Kickbacks
disregard for the truth, presented, or caused to be presented, to an officer, employee, or agent of the
United States, or a contractor thereof, false or fraudulent claims that were paid with federal funds.
Those claims were false or fraudulent because they were for services that were provided in violation
of the Federal anti-kickback statute.
182. Each of the defendants knowingly and willfully offered and/or paid remuneration
(including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind, to
referring physicians and to independent sales representatives to induce physicians to refer patients to
SNAP for home sleep testing services, for which payment was made in whole or in part by the Medicare
program.
183. Defendants knowingly caused false claims for payment or approval to be presented to
the United States, when they submitted and/or caused the submission of claims to Medicare for home
sleep testing services that were impermissibly linked to an illegal offer of kickbacks violation of the
Anti-Kickback Statute.
184. Pursuant to the Anti-Kickback Statute and the False Claims Act, the defendants are
liable to the United States under the treble-damage and civil-penalty provisions of the False Claims
Act for a civil penalty of not less than $5,500 and not more than $11,000 for each of the false or
fraudulent claims herein, and for violations of the FCA after November 2, 2015, a civil penalty of
53
not less than $10,781 and not more than $21,563, plus three times the amount of damages that the
United States has sustained because of the defendants actions.
WHEREFORE, the United States requests that judgment be entered in its favor, as follows:
a. Judgment for the United States against each of the defendants, jointly and severally,
treble the governments damages, and civil penalties for the maximum amount allowed by law;
b. For an award of costs pursuant to 31 U.S.C. 3729(a); and
c. For such further relief as is proper.
Respectfully submitted,
JOHN R. LAUSCH, Jr.

United States Attorney
By: s/ Sarah J. North

SARAH J. NORTH
Assistant United States Attorney
219 South Dearborn Street
Chicago, Illinois 60604
(312) 353-1413
sarah.north@usdoj.gov
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USA V Snap Diagnostics, LLC, Gil Raviv and Stephen Burton (1:15-cv-06204)

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Case: 1:15-cv-06204 Document #: 29 Filed: 12/18/17 Page 1 of 54 PageID #:546

UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA, STATE )

MICHIGAN, STATE OF NEVADA, )

COMPLAINT IN INTERVENTION OF THE UNITED STATES OF AMERICA

2. SNAP Diagnostics is a nationwide provider of home sleep testing diagnostic

unnecessary home sleep testing services and services occasioned by kickbacks.

Ravivroutinely double- and triple-billed federal healthcare programs, including Medicare, by

4. In addition, SNAPs business model relied on several unlawful kickback schemes.

Jurisdiction and Venue

U.S.C 1331, 1345.

Board, and the United States Office of Personnel Management.

9. Defendant SNAP Diagnostics, LLC, is a provider of home sleep testing services,

and upon information and belief resides in Northbrook, Illinois.

A. The False Claims Act

U.S.C. 3729(a)(1), (2); 31 U.S.C. 3729(a)(1)(A), (a)(1)(B) (as amended).

13. The FCA provides, in pertinent part, that a person who:

(a)(1)(A) knowingly presents, or causes to be presented, a false or fraudulent claim for

(1) the terms knowing and knowingly

B. The Anti-Kickback Statute

16. The Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), arose out of Congressional

Patient and Program Protection Act of 1987, Pub. L. No. 100-93.

In relevant part, 42 U.S.C. 1320a-7b(b) provides:

(B) in return for purchasing, leasing, ordering or arranging for or recommend

(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or

States v. Nagelvoort, 856 F.3d 1117 (7th Cir. 2017).

19. Compliance with the Anti-Kickback Statute is a condition of payment by the

II. Diagnosis and Treatment of Obstructive Sleep Apnea

commonly employed comprehensive diagnostic sleep test, is furnished in a sleep laboratory

as one of the parameters.

test results to determine whether a patient has OSA.

walls and the obstruction of airflow during sleep.

& Medicaid Services (CMS).

with private contractors, referred to as fiscal intermediaries, carriers, and Medicare

by healthcare providers. 42 U.S.C. 1395h; 42 C.F.R. 421.3, 421.100.

the providers to submit truthful and accurate claims.

statutes, regulations, and guidelines in order to be reimbursed by Medicare. When participating in

for coverage of services. 42 C.F.R. 424.516(a)(1); 42 C.F.R. 424.516(a)(2).

medically necessary. 42 U.S.C. 1395y(a)(I)(A). According to Medicare.gov, medically

necessary is defined as health-care services or supplies needed to prevent, diagnose, or treat an

Medicare reimbursement are reasonable and medically necessary. 42 U.S.C. 1395y(a)(1)(A); 42

33. An Independent Diagnostic Testing Facility (IDTF) is an entity that is

change information or to reactivate, revalidate, and/or terminate Medicare enrollment.

not true, correct, or complete.

36. SNAP Diagnostics enrolled with Medicare as an IDTF. In that enrollment

to comply with Medicare laws, regulations, and program instructions.

assigned NPI with the Medicare program.

Transaction Access Number. A blank copy of a Form CMS 1500 is available at

A. Medicare Coverage for Independent Diagnostic Testing Facilities Home Sleep

Sleep Testing for Obstructive Sleep Apnea, 240.4.1.

and deceased members.

from the treating physician.

46. Medicare administrative contractors (MACs) provide further guidance regarding

Manual, Pub. No. 100-08, ch. 13, 13.1.3.

how they should be claimed.

HCPCS codes G0398, G0399, and G0400, are:

. . . covered for the purpose of testing a patient for the diagnosis of

Medicare Benefit Policy Manual, Chapter 15, Section 70).

must be have specified training in sleep medicine.

necessity for the additional tests will be required.

Excessive daytime sleepiness, impaired cognition, mood disorders, or insomnia; or, b.

Obstructive Sleep Apnea (L27230) (Retired).

regulatory requirements. (Emphasis added).