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A North Carolina businessman and his durable medical equipment company are accused of overbilling the state’s Medicaid program $1.85 million for specialized nutritional formulas while allegedly providing common nutritional shakes like Ensure, the federal government said in a lawsuit.

Alleged Medicaid Overbilling Scheme

Benson Ejindu of Union County, North Carolina, allegedly submitted fraudulent Medicaid reimbursement claims from May 2017 to August 2019 through two companies, Joy Medical Supply and AsaAsa Medical Supply and Home Oxygen. According to the federal government’s complaint, Ejindu falsely billed Medicaid for high-cost nutritional formulas used to treat inherited metabolic disorders but instead provided patients with standard nutritional shakes such as Ensure, PediaSure, Boost, and Glucerna.

Ejindu allegedly used incorrect reimbursement codes to inflate payouts, claiming Medicaid reimbursements for formulas like Cyclinex and Glutarex, which are medically necessary for rare conditions.

"Ejindu, through Joy Medical and AsaAsa, systematically misrepresented the type of enteral formula provided to Medicaid beneficiaries," the complaint states.

Evidence of Misrepresentation

The government alleges that Ejindu knowingly submitted false claims and maintained false records. The complaint highlights that the labels on the shakes his companies distributed explicitly state they are not intended for treating inherited metabolic disorders such as galactosemia. The government contends that this labeling indicates Ejindu was aware of the fraudulent nature of his reimbursement requests.

Further, neither Joy Medical nor AsaAsa Medical is registered as a business entity in North Carolina, adding to the concerns about the legitimacy of their operations.

Financial and Legal Penalties

The federal government seeks treble damages totaling $5.56 million for the alleged false reimbursements, along with penalties ranging from $4.42 million to $8.84 million.

The lawsuit accuses Ejindu of multiple violations, including:

• Submitting false claims
• Keeping false records
• Unjust enrichment
• Receiving mistaken Medicaid payments

Legal Representation

The government is represented by Matthew R. Petracca of the North Carolina Department of Justice and Holly H. Snow of the U.S. Department of Justice. Counsel information for Ejindu was not immediately available, and he could not be reached for comment.

Broader Implications

The case underscores the government's focus on rooting out Medicaid fraud, particularly schemes that exploit reimbursement systems to profit unjustly. If successful, the lawsuit could serve as a warning to other healthcare providers about the severe consequences of misusing public healthcare funds.