A settlement has been reached to resolve False Claims Act allegations against Family Medicine Centers of South Carolina LLC, Its Co-Owner, and Its Laboratory Director.
Family Medicine Centers of South Carolina LLC (FMC) will pay $1.56 million under the settlement, while its principal owner and former CEO Stephen Serbin and its former Laboratory Director Victoria Serbin have also agreed to pay $443,000.
The allegations arose from a lawsuit that claimed Family Medicine Centers of South Carolina LLC, Its Co-Owner, and Its Laboratory Director submitted and caused the submission of false claims to the Medicare and TRICARE programs.
According to the government, allegedly FMC, Dr. Serbin and Victoria Serbin were responsible for submitting false claims to Medicare and Tricare for medically unnecessary laboratory services. They allegedly created custom laboratory panels of diagnostic tests that aren’t appropriate for routine measurement and performed the tests without an order from the treating physician. They allegedly implemented standing orders to make sure these tests were performed with specific frequency, and not because of clinical need. They allegedly programmed the FMC billing software to change certain billing codes for laboratory tests to ensure Medicare would pay.
Also, allegedly FMC submitted claims to Medicare that violated the physician self-referral prohibition, known as the Stark Law, which is intended to prevent a physician’s medical judgment from being compromised by improper financial incentives. Allegedly, FMC’s incentive compensation plan paid doctors a percentage of the value of laboratory and other diagnostic tests that these same doctors ordered through FMC. Family Medicine Centers of South Carolina then billed Medicare for the costs.
“Healthcare decisions should be made by physicians based on medical science and not with regard to maximizing the doctor’s own income,” said U.S. Attorney Beth Drake for the District of South Carolina. “Our goal in bringing this case was not only to recover money for improper healthcare claims, but also to deter similar conduct and promote health care affordability.”
Reportedly, as part of the settlement, FMC and the Serbins have also agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which ensures the Serbins will have no management role in FMC for five years and obligates FMC to undertake other substantial internal compliance reforms, including hiring an independent review organization to conduct annual claims reviews.
The Whistleblower, Dr. Schaefer, formerly employed by FMC, will receive $340,510.
