AmMed Direct, a company that sells diabetic supplies, has agreed to pay $18 million to resolve allegations that it improperly billed Medicare for supplies purchased as a result of a bait-and-switch advertising scheme and that it failed to refund Medicare for supplies that were subsequently returned by beneficiaries.  According to the allegations, AmMed published an ad offering free cookbooks for customers who called AmMed and encouraged callers who were Medicare beneficiaries to purchase Medicare-reimbursed supplies.  AmMed also failed to refund Medicare payments when beneficiaries returned the supplies.

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