Vienna, VA

AZ Diabetic Supply, Inc. Ordered to Pay $12 Million for Submitting False Claims to Medicare

Desiree Haros
diabetes kitPhoto byMykenzie JohnsononUnsplash

Alexandria, Va. – In a recent legal case, AZ Diabetic Supply, Inc. (AZD), a durable medical equipment (DME) provider based in Vienna, has been ordered to pay a hefty sum of $12 million for its involvement in submitting nearly 1,000 false and fraudulent claims to Medicare for reimbursement. The case highlights the consequences of fraudulent activities within the healthcare industry and serves as a warning to others engaging in similar practices.

Owned and operated by Hisham Zaghal, a resident of Vienna, AZD faced allegations that between January 2016 and December 2021, it received over $600,000 in reimbursement claims from Medicare for medical braces provided to Medicare-enrolled patients. However, these claims were based on DME prescriptions that AZD had unlawfully purchased from marketing companies. AZD paid a fee for each prescription it acquired, utilizing the prescriptions and the personal and medical data provided by the marketing companies to submit a staggering 923 fraudulent Medicare claims for reimbursement.

The United States filed a complaint in district court against AZD, holding the company liable for its actions. Subsequently, the District Court for the Eastern District of Virginia entered a judgment against AZD for damages and penalties under the False Claims Act, totaling $12,036,554.48.

Hisham Zaghal, the owner of AZD, reached a separate settlement agreement with the United States, acknowledging his alleged role in the scheme. Under this agreement, Zaghal agreed to pay $10,000 and accept a three-year voluntary exclusion from federally funded healthcare programs. Additionally, he relinquished $57,690.12 in funds held in escrow by the Department of Health & Human Services (HHS) from the nationwide suspension of payments to AZD and Zaghal. It's important to note that the claims against Zaghal resolved by the settlement remain allegations, and there has been no determination of liability.


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