Kinex Medical Company, LLC has agreed to pay $6.9 million to settle allegations that it submitted false claims to Medicare and other federal programs.
A Waukesha-based medical equipment supplier has agreed to pay nearly $7 million to settle allegations of bilking federal healthcare programs, highlighting persistent fraud risks in taxpayer-funded systems amid similar scandals in neighboring states.
Kinex Medical Company, LLC, which distributes durable medical equipment like knee, shoulder, and hip braces, will pay $6,925,000 to resolve claims under the False Claims Act, the U.S. Attorney’s Office for the Eastern District of Wisconsin announced. From 2019 to 2024, Kinex allegedly submitted false claims to Medicare, TRICARE, the Federal Employees Health Benefits Program, and the Department of Labor’s Office of Workers Compensation Programs by providing medically unnecessary braces.
The company reportedly enticed patients to accept the items by waiving co-pays and deductibles and offering free additional equipment, circumventing safeguards meant to ensure only essential care is billed.
“Kinex induced patients to receive braces that neither the patients nor their doctors thought they needed, all in an effort to receive taxpayer money,” U.S. Attorney Brad Schimel said in a statement. “This settlement imposes a significant penalty on Kinex and will make taxpayers whole.”
Kinex will also enter a Corporate Integrity Agreement with the HHS Office of Inspector General for ongoing compliance monitoring. The company did not admit liability as part of the settlement.
This resolution comes as federal auditors continue uncovering improper payments in Medicaid programs. A July 2025 HHS Office of Inspector General audit found Wisconsin made at least $18.5 million in improper fee-for-service Medicaid payments for applied behavior analysis services provided to children with autism from 2021-2022, with an additional $94.3 million flagged as potentially improper due to documentation failures and non-compliant billing. The OIG recommended Wisconsin refund $12.2 million to the federal government and implement stronger oversight.
In neighboring Minnesota, fraud concerns have escalated dramatically. The state faces investigations into at least 200 providers for potential fraud across 14 Medicaid services, with federal officials withholding hundreds of millions in matching funds over alleged program integrity shortcomings. Estimates suggest billions in potential losses from waste, fraud, and abuse in high-risk areas.
