Healthcare Fraud

A settlement has been reached to resolve False Claims Act allegations against Healogics Inc.

The allegations arose from a lawsuit that claimed Healogics Inc violated the False Claims Act by knowingly causing wound care centers to bill Medicare for unnecessary hyperbaric oxygen (HBO) therapy.

HBO therapy is a service covered by Medicare that is used to treat chronic wounds by exposing the entire body to oxygen under increased atmospheric pressure.

The settlement resolves allegations that from 2010 through 2015, Healogics knowingly submitted or caused the submission of false claims to Medicare for medically unnecessary HBO therapy. Under the settlement, Healogics agreed to pay $17.5 million, plus an additional $5.01 million if certain financial contingencies occur within the next five years, for a total potential payment of up to $22.51 million.

 “Medicare beneficiaries are entitled to care based on their clinical needs and not the financial goals of healthcare providers,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division.  “All providers of taxpayer-funded federal healthcare services, whether contractors or direct billers, will be held accountable when their actions knowingly cause false claims for medically unnecessary services to be submitted.”

In addition, Healogics has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General which includes, among other things, a claims review and a system review both to be conducted by an Independent Review Organization.   

Reportedly, Healogics will also pay nearly $400,000 in a separate settlement regarding improper coding.

The whistleblower, James Wilcox, a former Director for Research and Quality for Medical Affairs at Healogics and whistleblowers in a separate lawsuit, Dr. Benjamin Van Raalte, Dr. Michael Cascio, and John Murtaugh, two doctors and a former program director who worked at Healogics-affiliated wound care centers, will receive up to $4,276,900 as part of the settlement. 

A settlement has been reached to resolve False Claims Act allegations against Caris Healthcare.

The allegations arose from a lawsuit that claimed Caris Healthcare L.P. and its wholly-owned subsidiary, Caris Healthcare LLC knowingly submitted false claims, and knowingly retaining overpayments, for the care of patients who were ineligible for the Medicare hospice benefit because they were not terminally ill.

According to the government, allegedly, in an effort to meet the aggressive admissions and census targets set by the company, Caris admitted patients whose medical records did not support a terminal prognosis.  Furthermore, allegedly, when Caris was alerted to the ineligibility of patients, the hospice provider continued to submit claims and took no meaningful action to determine if it had received improper payments.

Reportedly, 40% to 50% of Caris' claims for payment were "false or fraudulent." These claims were paid by the government, thinking they were legitimate.

“It is completely unacceptable for providers to retain overpayments from Medicare after being put on notice of the likelihood of such overpayments.  Under the law, providers must go beyond merely conducting audits and providing forums for employee concerns.  Rather, when Medicare rule violations have been revealed, the provider must take meaningful action to correct them, including repaying Medicare for funds they improperly received.   Such corrective actions are vital to the integrity of the Medicare program, and the U.S. Attorney’s Office will continue to use the resources available to it to ensure the government is properly reimbursed for funds it is owed,” said J. Douglas Overbey, U.S. Attorney for the Eastern District of Tennessee.

The whistleblower, Barbara Hinkle, a registered nurse who formerly worked for Caris Healthcare, share of the settlement will be $1,402,500.

A settlement has been reached to resolve False Claims Act allegations against Signature HealthCARE LLC.

The allegations arose from a lawsuit that claimed Signature HealthCARE LLC (Signature) knowingly submitted false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary and skilled. In addition, allegedly, Signature submitted forged pre-admission certifications of patient need for skilled nursing to the state of Tennessee’s Medicaid program. 

According to the government, allegedly, Signature engaged in various practices that resulted in the submission of claims for unreasonable, unnecessary, and unskilled services to Medicare patients, including: presumptively placing patients in the highest therapy reimbursement level, rather than relying on individualized evaluations to determine the level of care most suitable for each patient’s clinical needs; providing the minimum number of minutes required to bill at a given reimbursement level while discouraging the provision of additional therapy beyond that minimum threshold; and,  pressuring therapists and patients to complete the planned minutes of therapy even when patients were sick or declined to participate in therapy.

“Health care providers who engage in deceptive practices place patients at unnecessary risk and contribute to the financial distress of our federal healthcare programs,” said U.S. Attorney Cochran for the Middle District of Tennessee.  “Our dedicated teams of civil enforcement attorneys will work tirelessly with the relators who report fraud such as this and with our law enforcement partners who investigate healthcare fraud.  When we determine that companies are cheating the taxpayers, we will hold them accountable as we have in this case.”

Under the settlement agreements, Signature has agreed to pay more than $30 million.  As part of the resolution, the State of Tennessee will receive a portion of the overall settlement. 

The whistleblower’s, former Signature therapy employees Kristi Emerson and LeeAnn Tuesca, will receive a portion of the recovered funds.

A settlement has been reached to resolve False Claims Act allegations against Allegiance Health Management Inc.

The allegations arose from a lawsuit that claimed Allegiance Health Management Inc (Allegiance) and four hospitals owned and operated by Allegiance submitted and caused other hospitals to submit claims for reimbursement from Medicare for services that were not medically reasonable or necessary.   

According to the government, beginning in 2005, Allegiance allegedly cut deals with hospitals to provide Intensive Outpatient Psychotherapy services to patients on the hospitals' behalf.

Reportedly, Allegiance established an Inspirations Outpatient Counseling Center, where Allegiance employees identify potential patients, created patient treatment plans, and performed IOP services at these hospitals.

This settlement resolves claims that Allegiance provided IOP services to Medicare patients that did not qualify reimbursement because:

• The patients' medical conditions did not require IOP treatment;

• The patients' treatments were not consistent with an individualized treatment plan designed to address specific mental health needs and achievable goals;

• The patients' progress was not being tracked or documented;

• The patients received inappropriate levels of treatment;

• The therapy provided was primarily recreational or diversional, not therapeutic. 

“Medicare funds must be targeted to those with a legitimate need,” said Special Agent in Charge CJ Porter for the Office of Inspector General of the U.S. Department of Health and Human Services.  “Entities that bill for needless services – as alleged here – cheat taxpayers and threaten the integrity of government health programs.”

The whistleblowers, Ryan Ladner, a former employee of Allegiance, share of the settlement will be approximately $300,000.

A settlement has been reached to resolve False Claims Act allegations against Mercy Health.

The allegations arose from a lawsuit that claimed Mercy Health engaged in improper financial relationships with referring physicians.

According to the government, Mercy Health self-disclosed improper financial relationships with referring physicians including one oncologist and five internal medicine physicians who received compensation that exceeded fair market value for their services.

“When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services and higher health care costs,” said Acting Assistant Attorney Chad A. Readler, head of the Justice Department’s Civil Division.  “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”  

Federal law restricts the financial relationships that hospitals may have with doctors who refer patients to them.

A settlement has been reached to resolve False Claims Act allegations against Rotech Healthcare Inc.

The allegations arose from a lawsuit that claimed Rotech Healthcare Inc knowingly submitted false claims for portable oxygen contents to Medicare.

According to the government, Rotech admitted to billing portable oxygen contents to Medicare for beneficiaries who did not use or require them. Furthermore, the company admitted to billing Medicare regardless of whether such contents were delivered.

“Many people believe that healthcare fraud is a victimless crime; I assure you it is not,” said United States Attorney Joseph D. Brown of the Eastern District of Texas.  “Medicare is funded largely by you and me, the American taxpayers, and fraud contributes to runaway health care costs.  I commend the whistleblower who had the courage to come forward and who worked with investigators to get to the bottom of this case.  Because of her, we were able to recoup millions of dollars improperly paid to Rotech.”

Medicare covers the cost of renting certain portable and stationary oxygen equipment as well as the oxygen that is used with that equipment.

Reportedly, between January 2009 and March 2012, Rotech automatically billed Medicare for portable oxygen contents for all Medicare beneficiaries after the 36-month rental period, without verifying that the beneficiaries used or needed portable oxygen, and without obtaining the requisite proof of delivery.  Rotech continued this practice despite knowing that it resulted in the submission of claims for portable oxygen contents that were ineligible for reimbursement.

The whistleblower, Janet Hale, a former employee in Rotech’s billing department, share of the settlement will be approximately $1.65 million.

Banner Health will pay more than $18 million to settle allegations that 12 of its hospitals in Arizona and Colorado knowingly submitted false claims to Medicare by admitting patients who could have been treated on a less costly outpatient basis.

According to the government, from November 1, 2007 through December 31, 2016, Banner Health allegedly billed Medicare for "short-stay, inpatient procedures" performed at the 12 hospitals that should have been billed on a less costly outpatient basis.  The government also alleged that Banner Health inflated in the number of hours for which patients received outpatient observation care in their reports to Medicare.

“Taxpayers should not bear the burden of inpatient services that patients do not need,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division.  “The Department will continue its efforts to stop abuses of the nation’s health care resources and to ensure that patients receive the most appropriate care.”

Reportedly, Banner Health entered into a corporate integrity agreement with the U.S. Department of Health and Human Services Office of Inspector General that requires the system to retain an independent review organization to evaluate the accuracy of the company's claims for services to federal healthcare program beneficiaries.

The settlement doesn't involve any findings of wrongdoing on Banner's part, said Becky Armendariz, senior director of marketing and public relations for the Phoenix-based health system.

The whistleblower, Cecilia Guardiola, a former Banner employee, share of the settlement will be approximately $3.3 million.

A group of Newnan, Georgia based orthopedic and anesthesia providers agreed to pay the federal government $3.2 million to settle allegations they were involved in a False Claims Act kickback scheme.

According to the government, Georgia Bone & Joint (GBJ), Southern Bone & Joint a/k/a Summit Orthopaedic Surgery Center (Summit Surgery Center), Southern Crescent Anesthesiology, PC (SCA), Sentry Anesthesia Management, LLC (Sentry), and David LaGuardia (LaGuardia) agreed to pay $3.2 million to settle allegations that LaGuardia, Sentry, and SCA provided a free medical director to Summit Surgery Center in order to induce it to choose to perform more procedures at the surgery center rather than in the GBJ office; and that GBJ and LaGuardia caused the submission of false claims to Medicare for prescription drugs purchased outside of the United States and not approved by the U.S. Food and Drug Administration (FDA).

“Kickbacks should never play a role in medical decision-making,” said U.S. Attorney Byung J. “BJay” Pak.  “It is critical to our health care system that patients seeking health care know that their providers’ recommendations are based on what is in the patient’s best interests and not influenced by illegal kickbacks or arrangements.”

The whistleblowers, Sharon Kopko, a former Practice Administrator for SBJ, share of the settlement will receive a share of the settlement.

A settlement has been reached to resolve False Claims Act allegations against a Tennessee Chiropractor.

According to the government, a chiropractor operating pain clinics from Lenior City, Tennessee has paid $1.45 million, plus interest, to resolve False Claims Act violations. Under the same settlement, a pain clinic nurse in Cookeville, Tennessee is to pay $32,000 and surrender her DEA registration to settle allegations that she violated the Controlled Substances Act.

The whistleblower share of the settlement will be approximately $246,500.

Reportedly, Matthew Anderson and his management company, PMC LLC, managed four pain clinics in Tennessee, most recently known as; Cookeville Center for Pain Management; Spinal Pain Solutions in Harriman; Preferred Pain Center of Grundy County in Gruetli Laager; and McMinnville Pain Relief Center.

As part of the settlement agreement, Matthew Anderson and PMC resolved claims that from 2011 through 2014, they caused pharmacies to request for Medicare and TennCare payments for painkillers, including opioids, without valid medical purpose. In addition, it resolved allegations about Anderson’s too high reimbursements for office visits, and the PMC’s claims on Medicare for nurse services in 2011 and 2012 that failed to abide by the Tennessee law.

Under the settlement agreement, the United States will receive $1,040,275, and the State of Tennessee will receive $163,225. In addition, Matthew Anderson and PMC agreed to be excluded from billing federal health care programs for five years.  Three of the clinics will also forfeit $53,840, which the United States seized from the clinics’ bank accounts.

Also, as part of the settlement agreement, Cindy Scott, a nurse practitioner from Nashville, will pay $32,000 and surrender her DEA registration until October 2021.  Furthermore, Cindy Scott is prohibited from prescribing medications until her DEA registration is renewed.

“More Americans are dying because of drugs today than ever before—a trend that is being driven by opioids,” said Attorney General Jeff Sessions. “If we’re going to end this unprecedented drug crisis, which is claiming the lives of 64,000 Americans each year, doctors must stop overprescribing opioids and law enforcement must aggressively pursue those medical professionals who act in their own financial interests, at the expense of their patients’ best interests.  Today’s settlement is a positive step that will help save lives, as well as protect taxpayers’ money, in Tennessee and across the United States.”

A settlement has been reached to resolve False Claims Act allegations against AmeriCare Ambulance Service.

The allegations arose from a lawsuit that claimed AmeriCare Ambulance Service Inc and its sister company, AmeriCare ALS Inc (collectively, AmeriCare) defrauded Medicare by billing for medically unnecessary ambulance transportation services.

According to the governement, from January 2008 through December 2016, AmeriCare allegedly submitted fraudulent claims to Medicare and TRICARE for Basic Life Support (BLS), non-emergency ambulance transports that were not medically justified. In support of these allegations, the government cited information regarding unwarranted ambulance transports it had received from numerous AmeriCare employees, as well as audits conducted by the agencies that administer Medicare and TRICARE.

In addition, the government cited damaging testimony it had elicited under oath from members of AmeriCare’s management team during the course of the investigation. This testimony, along with the other evidence obtained by the government, revealed that AmeriCare had engaged in a systemic practice over many years of submitting fraudulent claims to the government falsely attesting to the medical necessity of its non-emergent, BLS ambulance transports. That proof also revealed that AmeriCare had created thousands of false reports and other documentation during this time period, in a failed effort to support this illicit practice.

Reportedly, AmeriCare has also agreed to enter into an integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.

 “Medical service providers who engage in systemic fraud at the core of their business levy an assault on federal health care programs and the American taxpayer,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services, Office of Inspector General. “In spite of often false medical documents, the OIG and our partners will not be deterred in our efforts to root out this type of fraud and protect the American public.”

The whistleblower, a former AmeriCare employee, Ernest Sharpshare, will receive $1.15 million as part of the settlement.