Zynex admits to health care fraud scheme, agrees to pay DOJ millions

A Colorado medical device company admitted to orchestrating an elaborate health care fraud scheme that resulted in the overbilling of patients and insurers by hundreds of millions of dollars.

Zynex Inc., an Englewood-based firm that manufactures and sells medical devices used for pain management and rehabilitation, entered into an agreement Tuesday with the U.S. Department of Justice to avoid prosecution.

The company, as part of the deal, agreed to pay between $5 million and $12.5 million in penalties — the final tally will depend on its earnings and profit during the settlement period — and will forfeit millions of dollars in unpaid claims.

Zynex admitted to participating in a conspiracy to commit health care fraud, securities fraud, mail fraud and other violations, the U.S. Attorney’s Office for the District of Rhode Island announced in a news release.

The agreement comes a month after a federal grand jury indicted two former top Zynex executives who allegedly spearheaded the years-long scheme.

Zynex, in its deal with the government, also admitted to collecting more than $873 million for its products, including more than $600 million for supplies, “the vast majority of which were the result of fraud,” investigators said.

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The company acknowledged that it shipped and billed for medically unnecessary supplies in excess quantities and misled investors who were unaware of the fraudulent billing practices.