Medical devicemaker Zynex agreed to enter into a nonprosecution agreement with the U.S. attorney’s office for the District of Rhode Island and admitted to participating in a conspiracy to commit healthcare fraud, securities fraud, mail fraud and other violations.
Under the agreement, which is subject to approval by the bankruptcy court in Zynex’s ongoing Chapter 11 proceedings, the company will pay between $5 million and $12.5 million depending on its earnings and profit over the period of the agreement, according to a Feb. 17 Justice Department news release. Zynex will also forfeit all unpaid claims submitted prior to Sept. 1, 2025, including claims submitted during the period of suspension of Tricare payments.
The forfeited claims include more than $85 million billed to Tricare during a suspension period and more than $13 million billed to other payers and patients. During the relevant period, Zynex collected more than $873 million for its products, including more than $600 million for supplies — the majority of which were the result of fraud — according to the statement of facts included in the agreement.
The company admitted it shipped and billed for medically unnecessary supplies in excess quantities, sometimes as many as 32, 64 or 128 electrode pairs per patient each month, and misled investors by concealing that its revenue was driven by fraudulent billing practices, the release said.
