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Vibra Healthcare to Pay $32.7 Million to Resolve Claims for Medically Unnecessary Services

The Department of Justice announced yesterday that Vibra Healthcare LLC (Vibra), a national hospital chain headquartered in Mechanicsburg, Pennsylvania, has agreed to $32.7 million, plus interest, to resolve claims that Vibra violated the False Claims Act by billing Medicare for medically unnecessary services.

“Medicare beneficiaries are entitled to receive care that is determined by their clinical needs and not the financial interests of healthcare providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of 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 cause false claims for medically unnecessary services to be submitted.”

Vibra operates approximately 36 freestanding long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states.  LTCHs provide inpatient hospital services for patients whose medically complex conditions require long hospital stays and programs of care.  IRFs are intended for patients needing rehabilitative services that require hospital-level care.  The government alleged that between 2006 and 2013, Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs who did not demonstrate signs or symptoms that would qualify them for admission.  Moreover, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care.  In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.

“Pursuing and recovering fraudulent billing for unnecessary services is a priority of my office,” stated U.S. Attorney John E. Kuhn Jr. for the Western District of Kentucky.  “This significant case against Vibra Healthcare and today’s settlement agreement is but one example of the vigorous work against healthcare fraud taking place in the Western District of Kentucky and across the nation.”

As part of the settlement, Vibra also agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.

“Medical necessity is fundamental if health providers wish to claim taxpayer funds for medical care,” said Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “OIG is committed to protecting precious Medicare dollars and ensuring that beneficiaries receive quality, necessary long term care.”

Part of the allegations resolved by this settlement were originally filed under the qui tam or whistleblower provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan.  Daniel filed her suit in the Southern District of Texas, where one of Vibra’s LTCHs was located.  Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery.  Daniel will receive at least $4 million.

This settlement illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal healthcare programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch; the U.S. Attorneys’ Offices for the Southern District of Texas in Houston and for the Western District of Kentucky; and the HHS-OIG.  The qui tam case is captioned United States ex rel. Daniel v. Vibra Healthcare, LLC, Civil Action No. 10-5099 (S.D. Tex.).

The claims resolved by the settlements are allegations only and there has been no determination of liability.

North American Health Care Inc. to Pay $28.5 Million to Settle Claims for Medically Unnecessary Rehabilitation Therapy Services

On Monday, the Department of Justice announced that North American Health Care Inc. (NAHC), its chairman of the board, John Sorenson, and its senior vice president of Reimbursement Analysis, Margaret Gelvezon, have agreed to pay a total of $30 million to resolve allegations that they violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary rehabilitation therapy services provided to residents at NAHC’s skilled nursing facilities (SNFs).  Under the settlement agreement, NAHC has agreed to pay $28.5 million. Mr. Sorensen has agreed to pay $1 million and Ms. Gelvezon has agreed to pay $500,000.

“Medicare patients and those insured by TRICARE are entitled to receive care necessary for their clinical needs and not the financial needs of their health providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Health care providers will be held accountable if they bill for unnecessary services or treatment.”

NAHC is a private, for-profit company headquartered in Orange County, California, that has service agreements to operate 35 SNFs, most of them in California.  The SNFs provide inpatient rehabilitation services, including physical, occupational, and speech therapy, to patients.  The United States contends that NAHC caused false claims to be submitted to Medicare and TRICARE, seeking payment for medically unnecessary rehabilitation therapy services provided to residents at the NAHC facilities.

The United States further contends that Gelvezon, in her capacity as an officer of NAHC, contributed to this conduct by creating the improper billing scheme.  The government also contends that Sorensen, in his capacity as chairman of the board of NAHC, reinforced this scheme at the NAHC facilities.  The United States contends that this conduct occurred during the period from Jan. 21, 2005, to Oct. 31, 2009, for all of the NAHC SNFs and continued during the period of Nov. 1, 2009, to Dec. 3, 2011, for three of the SNFs in the Northern District of California area.

“This office is committed to safeguarding the federal health care programs and the patients who are enrolled in them,” said U.S. Attorney Brian J. Stretch for the Northern District of California.  “Skilled nursing facilities such as NAHC treat some of the most vulnerable patients in the health care system.  These facilities, and the individuals who run them, will be held accountable when they provide treatment based on financial motivations instead of the patients’ needs.”

“Providing medically unnecessary services to this fragile population can be taxing both for the patient and the program,” said Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven Ryan.  “Today’s settlement should send a message to others who may be engaging in these schemes that we will pursue justice for our beneficiaries and the programs.”

As part of this settlement, NAHC has also entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG.  The CIA applies to all facilities managed by NAHC and requires an independent review organization to annually review therapy services billed to Medicare.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.6 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, HHS-OIG and the FBI.

The claims resolved by the settlements are allegations only and there has been no determination of liability.

United States Settles False Claims Act Allegations Against Coastal Spine And Pain For $7.4 Million

United States Attorney A. Lee Bentley, III announced yesterday that Physicians Group Services, P.A., doing business as Coastal Spine and Pain (“Coastal”), has agreed to pay $7.4 million to the government to resolve allegations that Coastal violated the False Claims Act by performing medically unnecessary drug screening procedures.

The settlement relates to Coastal’s use of “Quantitative Drug Tests,” or tests that identify and count particles of illicit drugs in patients’ urine. The use of quantitative drug tests – tests that are very specific and also very expensive – is appropriate only if there is reason to doubt the more general and cheaper qualitative drug test screens.  The government contends that Coastal appropriately performed qualitative drug tests for its patients.  However, the United States contends that, regardless of the result of the less expense qualitative test, Coastal performed and billed for quantitative drug tests for all patients. The government contends this was medically unnecessary, as there was no reason to question or further confirm previous qualitative urine drug testing screens.

“The United States Attorney’s Office is committed to taking the steps necessary to protect Medicare, TRICARE, and other federal health care programs from fraud,” said U.S. Attorney Bentley.  “When health care practitioners conduct medical tests, they must only bill for them when it is appropriate and medically necessary.  We will vigorously pursue providers that perform tests indiscriminately, regardless of need.”

This case was developed through the proactive review of claims data. Coastal was a statistical outlier in terms of billing for quantitative drug test screens.  In fact, in each and every instance that Coastal billed for a qualitative drug test screen, it also billed for a quantitative drug test screen. This statistical outlier prompted questioning and investigation by the Department of Justice.

“New and expanded uses of data analytics to identify suspicious billing patterns, such as in this case, are providing law enforcement agencies with powerful investigative tools to combat fraud and abuse in federal health care programs,” said HHS OIG SAC Shimon Richmond.  “Medicare should only be paying for medical tests to improve the health of beneficiaries, not the profit margins of unscrupulous physicians.  Today’s settlement should serve as notice to others that fraud will be vigorously pursued.”

This civil settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered more than $30 billion through False Claims Act cases, with more than $18.3 billion of that amount recovered in cases involving fraud against federal health care programs.

“We appreciate the support from the Department of Justice in protecting the TRICARE benefit from fraud and helping to ensure the benefit continues to exist for our service members, families, and retirees,” said Vice Admiral R. Bono, Director, Defense Health Agency.

This matter was investigated with assistance from the Department of Health and Human Services Office of Inspector General (HHS/OIG) and the Defense Criminal Investigative Service (DCIS).  It was prosecuted by Assistant United States Attorney Jason Mehta.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.

If you know of or suspect health care fraud, contact us now.

Three Mount Sinai Health System hospitals to pay $2.95 million to settle False Claims Act suit

Three hospitals in the Mount Sinai Health System will pay a total of $2.95 million after allegations of violating the federal and New York False Claims Acts, New York Attorney General Eric T. Schneiderman has announced.

The entities involved are Mount Sinai Beth Israel (formerly Beth Israel Medical Center), Mount Sinai St. Luke’s (formerly St. Luke’s Hospital) and Mount Sinai Roosevelt (formerly Roosevelt Hospital) (together, the “Hospitals”) – and the Hospitals’ former partnership group, Continuum Health Partners Inc. (“Continuum,” and together with the Hospitals, “Defendants”).

According to allegations, the hospitals knowingly kept more than $844,000 in Medicaid overpayments that should have gone back to the government.

“Repaying Medicaid for false claims is not only vital to the integrity of the program, but it is also the law,” Schneiderman said. “We will not allow hospitals to drain important resources from the system, and will continue to ensure that the program is properly reimbursed for the funds that it is owed.”

The case occurred due to a whistleblower lawsuit. The whistleblower will receive $354,000 from the state as a reward.

If you know of or suspect health care fraud, contact us now.

The Estate of Dr. Kenneth Michael Rice and UMC Physicians Pay a Total of $3,280,000 to Resolve False Claims Act Allegations

The Estate of Dr. Kenneth Michael Rice and UMC Physicians (UMCP) have agreed to pay a total of $3,280,000.00 to the United States and the State of Texas to settle allegations that Dr. Rice and UMCP violated the False Claims Act, announced U.S. Attorney John Parker of the Northern District of Texas.

Specifically, the United States alleged that Dr. Rice, by and through UMCP, submitted false claims for payment to Medicaid and Medicare related to in-person evaluation and management services, as well as critical care services.  The Estate of Dr. Rice agreed to pay the United States and the State of Texas $2,000,000, collectively, to settle the allegations.  UMCP agreed to pay $1,280,000 to settle the matter.  Both the Estate of Dr. Rice and UMCP fully cooperated with the investigation and, by settling, did not admit any wrongdoing or liability.

UMCP, a physician practice management group located in Lubbock, Texas, employs healthcare providers for its sole managing member, the Lubbock County Hospital District d/b/a UMC Health System (UMC).  UMCP employed Dr. Kenneth Michael Rice as a healthcare provider at UMC from February 12, 1996 through his death on February 4, 2015.  The settlement resolves allegations that from January 2008 through February 2015, Dr. Rice, by and through UMCP, billed Medicare and Medicaid for in-person evaluation and management services at the higher physician fee rate, even though the services were often provided by non­physician providers.  Dr. Rice and UMCP are also alleged to have billed normal evaluation and management services to Medicare at the higher critical-care rate.  The Estate and UMCP deny the allegations.

“Health care providers, like all those that choose to do business with the government, must turn square corners when billing Medicare and Medicaid for services provided to patients,” U.S. Attorney Parker said.  “As this settlement demonstrates, we will continue to work to ensure that providers bill for and are paid for the services they provide – but no more.”

The Texas Medicaid Fraud Control Unit and the Civil Medical Fraud Division of the Office of the Attorney General for the State of Texas participated in the resolution of this matter.  The case was handled by Assistant U.S. Attorney Kenneth G. Coffin.

Johnson & Johnson Subsidiary Acclarent Inc. Pays Government $18 Million to Settle False Claims Act Allegations

Last Friday, the Department of Justice announced that California-based medical device manufacturer Acclarent Inc., a subsidiary of Johnson & Johnson, has agreed to pay $18 million to resolve allegations that the company caused health care providers to submit false claims to Medicare and other federal health care programs by marketing and distributing its sinus spacer product for use as a drug delivery device without U.S. Food and Drug Administration (FDA) approval of that use.

“The FDA approval process serves an important role in ensuring that federal health care participants receive devices that are safe, effective and medically appropriate,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will not permit companies to circumvent that process and put profits over patient safety.”

“The FDA plays a fundamental role in ensuring the safety and efficacy of medical devices and drugs in this country,” said U.S. Attorney Carmen M. Ortiz.  “Every time that patients receive a medical device or fill a prescription they should be able to take for granted that the FDA’s requirements have been met.  We will vigorously pursue those who ignore or seek to circumvent these important patient protections.”

“It is imperative that medical device companies adhere to FDA approval requirements so that patients are not subject to questionable medical treatments at taxpayer expense,” said Special Agent in Charge Phillip M. Coyne of the Department of Health and Human Services Office of Inspector General.  “Our investigators, working closely with our law enforcement partners, will continue to pursue allegations of such misconduct to hold fraudsters accountable and deter those tempted to launch such illegal scams.”

Acclarent sold a variety of medical devices used in sinus surgeries, including a device known as the Relieva Stratus MicroFlow Spacer (Stratus).  In 2006, Acclarent received FDA clearance to market the Stratus as a spacer to be used only with saline to maintain sinus openings following surgery.  The government alleged that Acclarent intended for the Stratus to be used instead as a drug-delivery device for prescription corticosteroids, including Kenalog-40, and that the device was specifically designed and engineered for this use.

The government further alleged that Acclarent marketed the Stratus as a drug delivery device even after the FDA rejected the company’s 2007 request to expand the approved uses for the Stratus.  For example, Acclarent employees trained physicians using a video that demonstrated the Stratus being used with prescription corticosteroid Kenalog-40 and also used a white, milky substance resembling Kenalog-40 when demonstrating the Stratus.

In 2010, Acclarent added a warning to its label regarding use of active drug substances in the Stratus; however, the government alleged that Acclarent nonetheless continued to market the Stratus for drug delivery.  By May 2013, Acclarent discontinued all sales of the Stratus and the company agreed to withdraw all FDA marketing clearances for the device, which is no longer commercially available in the United States.

On Wednesday, July 20th, Acclarent’s former Chief Executive Officer, William Facteau, 47, of Atherton, California and former Vice President of Sales, Patrick Fabian, 49, of Lake Elmo, Minnesota were convicted following a six-week jury trial of 10 misdemeanor counts of introducing adulterated and misbranded medical devices into interstate commerce.

The civil settlement with Acclarent resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The civil lawsuit was filed in the District of Massachusetts and is captioned United States ex rel. Melayna Lokosky v. Acclarent, Inc.  As part of today’s resolution, Lokosky will receive approximately $3.5 million from the settlement.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30 billion through False Claims Act cases, with more than $18.3 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with Acclarent was the result of a coordinated effort among the U.S. Attorney’s Office for the District of Massachusetts and the Civil Division’s Commercial Litigation Branch, with assistance from the FDA’s Office of Chief Counsel and HHS’ Office of Counsel to the Inspector General.  The investigation was conducted by the FBI’s Boston Field Office, HHS-OIG, the Defense Health Agency, FDA’s Office of Criminal Investigations, the Department of Veterans Affairs Office of Inspector General and the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.

Minnesota-Based Hospice Provider to Pay $18 Million for Alleged False Claims to Medicare for Patients Who Were Not Terminally Ill

The Department of Justice announced yesterday that Evercare Hospice and Palliative Care will pay $18 million to resolve False Claims Act allegations that it claimed Medicare reimbursement for hospice care for patients who were not eligible for such care because they were not terminally ill.  Evercare, now known as Optum Palliative and Hospice Care, is a Minnesota-based provider of hospice care in Arizona, Colorado and other states across the United States.

Hospice care is special end-of-life care for terminally ill patients intended to comfort the dying.  When a terminally ill Medicare patient elects hospice, Medicare no longer covers traditional medical care designed to improve or heal the patient.  Only Medicare patients who have a life expectancy of six months or less are considered terminally ill and eligible for the Medicare hospice benefit.

“Today’s settlement reflects the Justice Department’s continuing efforts to combat health care fraud and protect the nation’s elderly and most vulnerable citizens,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Our seniors rely on the hospice program to provide them with quality care, dignity and respect when they are terminally ill and need end-of-life care.  It is, therefore, critically important that we hold accountable those hospice providers that bill for medically unnecessary services in order to get higher reimbursements from the Medicare program. Such abuses threaten a vulnerable population and jeopardize this important benefit for others under the program.  The Justice Department will continue to protect taxpayer dollars and ensure that this critical benefit is available for Medicare patients who truly need it.”

This settlement resolves a lawsuit brought by the government alleging that Evercare knowingly submitted or caused to be submitted false claims to Medicare for hospice care from Jan. 1, 2007, through Dec. 31, 2013, for Medicare patients who were not eligible for the Medicare hospice benefit because Evercare’s medical records did not support that they were terminally ill.  The government’s complaint alleged that Evercare’s business practices were designed to maximize the number of patients for whom it could bill Medicare without regard to whether the patients were eligible for and needed hospice.  These business practices allegedly included discouraging doctors from recommending that ineligible patients be discharged from hospice and failing to ensure that nurses accurately and completely documented patients’ conditions in the medical records.

The allegations resolved by this settlement arose from whistleblower lawsuits initially filed by former employees of Evercare under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  The Act allows the United States to intervene in the lawsuits, which it did in this case.  The share to be awarded in this case has not yet been determined.

“The decision to put someone into hospice care is an emotionally wrenching one for the patient and the patient’s family,” said U.S. Attorney John Walsh for the District of Colorado.  “When hospice companies exploit and overbill Medicare by having people in hospice when they do not belong there, it jeopardizes this important benefit for others.  We will not tolerate such conduct.  The District of Colorado and the Department of Justice’s Civil Fraud Section deserve substantial credit for achieving this result in this Evercare Hospice case.”

“Hospice care is only medically necessary and reimbursable by Medicare for terminally ill patients with a life expectancy of six months or less,” said Special Agent in Charge Steven Hanson of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “We will continue to vigorously investigate health care companies that put their own profits above the medical needs of patients to ensure that companies bill Medicare only for reimbursable health care services.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30 billion through False Claims Act cases, with more than $18.3 billion of that amount recovered in cases involving fraud against federal health care programs.

This settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Colorado and HHS-OIG.

The lawsuits resolved by this settlement, which were consolidated in the District of Colorado, are captioned United States ex rel. Fowler and Towl v. Evercare Hospice, Inc., et al., No. 11-cv-00642 (D. Colo.) and United States ex rel. Rice v. Evercare Hospice, Inc., No. 14-cv-01647 (D. Colo.).  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

If you know of or suspect hospice fraud, contact us now.

Drayer Physical Therapy Institute, LLC Settle False Claims Act Case for $7,000,000

On Tuesday, Acting United States Attorney Beth Drake announced that the U.S. Attorney’s Office for the District of South Carolina has settled claims of health care fraud with Drayer Physical Therapy Institute, LLC (“Drayer”). Drayer has locations in South Carolina and 14 other states from Pennsylvania to Oklahoma. The United States contended that Drayer submitted claims to Medicare, TRICARE, and Federal Employee Health Benefit Programs for services being provided to multiple patients simultaneously as though the services were being provided by a physical therapist or physical therapist assistant to one patient at a time.

The investigation began with the filing of a whistleblower lawsuit called a qui tams lawsuit under the False Claims Act. The suit was filed by former employees of Drayer. The False Claim Act allows the government to recover actual damages and penalties of three times the actual damages and up to $11,000 per false claim. This settlement was reached based on Drayer’s ability to pay.

The False Claims Act allows individuals to file lawsuits with allegations that fraud has been committed against the federal government on behalf of the government. Whistleblowers, referred to as Relators in the False Claims Act, are entitled to share in any recovery received by the government. In this case, the two relators collectively will receive 24% of the funds of the settlement or $1,680,000 plus they are entitled to attorney fees. The relators performed significant work in the investigation of this case.

Ms. Drake said, “Whistle blower cases are important to the integrity of the health care system. These civil actions – targeted to routing out fraud and abuse – protect tax payers and patients by ensuring that health care decisions are made according to medical science and not based on dollar signs.”

“Health care companies must bill taxpayer-funded health programs honestly,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General. “Those engaging in deceptive billing practices can expect our aggressive investigation to recover inappropriately obtained funds.”

The claims resolved by this settlement are allegations only and there has been no determination of liability.

If you know of or suspect health care fraud, contact us now.

University of Missouri-Columbia Agrees to Pay United States $2.2 Million to Settle Alleged False Claims Act Violations

Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the University of Missouri-Columbia has agreed to pay the United States $2.2 million to settle allegations that it violated the False Claims Act by submitting claims for radiology services to federal programs such as Medicare, Medicaid, and TRICARE.  The United States alleged that certain attending physicians certified that they had reviewed the images associated with interpretative reports prepared by resident physicians when, in fact, they had not reviewed those images.

“Hospitals and physicians have the highest obligation to both protect patients by complying with the standard of care and to protect taxpayers by complying with the rules for billing federal programs.  This lengthy investigation by multiple agencies working together has produced a just result for both patients and taxpayers,” said United States Attorney Dickinson.

Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Kansas City Regional Office, stated, “Our office will continue to work with our law enforcement partners to ensure that qualified medical professionals are reviewing radiology exams such x-rays, MRIs, CT scans, ultrasounds, etc., to accurately diagnose our  beneficiaries’ medical conditions.”

“The Defense Criminal Investigative Service is committed to working with our partner agencies to combat fraud impacting the Department of Defense’s vital programs, operations and resources.  The victims of this kind of fraud are real people and it impacts those who have served our country the most,” said Brian J. Reihms, Special Agent in Charge, Defense Criminal Investigative Service (DCIS).

A federal investigation commenced in 2011 and led to an internal investigation by the university.  The university determined that two attending radiologists, Dr. Kenneth Rall and Dr. Michael Richards, violated Medicare and hospital rules when they certified certain interpretive reports prepared by resident physicians.  Medicare will pay claims for resident physicians to interpret radiological images but only if an attending radiologist also reviews the image and provides any necessary input to the interpretive report.  Rall and Richards left the employment of the university in June 2012.  The university cooperated throughout the lengthy investigation.  In addition to this False Claims Act settlement, the university also entered into a Corporate Integrity Agreement with HHS-OIG.

The case, United States ex rel. Galuten v. University of Missouri-Columbia, et al., Case No. 11-cv-04140-FJG (W.D. Mo.), was handled by the U.S. Attorney’s Office for the Western District of Missouri, HHS-OIG, and DCIS.  The claims settled by this agreement are allegations only, and there has been no determination of liability.

If you know of or suspect health care fraud, contact us now.

Medical Device Company Agrees To Pay $8 Million To Resolve Claims It Paid Illegal Kickbacks To Physicians

The Department of Justice announced yesterday that Minneapolis-based Cardiovascular Systems, Inc. (CSI), has agreed to pay $8 million to resolve allegations that it paid illegal kickbacks to induce physicians to use the company’s medical devices.

Derrick L. Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General for the region including North Carolina joins U.S. Attorney Rose in making today’s announcement.

According to allegations contained in filed court documents, CSI executed a kickback scheme to induce the use of its medical devices by doctors.  The government alleges that CSI violated the False Claims Act by providing marketing and other practice development services to physicians utilizing CSI’s devices to perform atherectomies.  Atherectomy is a procedure that clears blockages restricting blood circulation in arteries.  The government alleges that CSI developed and distributed marketing materials to promote physicians utilizing CSI’s devices to referring physicians; coordinated meetings between utilizing physicians and referring physicians; and developed and implemented business expansion plans for utilizing physicians.  The government alleges that CSI engaged in these activities to induce doctors to begin to use or continue to use CSI’s devices.

“Doctors are expected to provide medical advice and treatment options that benefit patients, not their own practice,” said U.S. Attorney Rose.  “A Company cannot reward physicians for using its medical devices over those of competitors.  The type of kickback scheme alleged in this case compromises good medical care and can lead to inefficient use of limited healthcare resources.  My office is committed to preventing medical device manufacturers from improperly influencing physicians’ medical judgment.  We will thoroughly investigate any such allegations,” Rose added.

Today’s settlement resolves a civil complaint filed in July 2013 by whistleblower Travis Thams, a former employee of CSI.  Mr Thams filed the allegations against CSI under the qui tam provisions of the False Claims Act, which permit private parties to file suit on behalf of the government and obtain a portion of the government’s recovery.

In addition to its settlement with the Justice Department, CSI has also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services – Office of Inspector General, requiring the company to engage in significant compliance efforts over the next five years, including engaging an independent review organization.

“Medical device companies engaging in kickbacks to boost profits undermine physicians’ medical judgment and drive up health care costs for everyone,” said Special Agent in Charge Jackson.  “Our agency will continue to work with our law enforcement partners to investigate and recover Medicare money that was improperly paid.”

This settlement was the result of a coordinated effort by the U.S. Attorney=s Office Western District of North Carolina and HHS-OIG.

The lawsuit is captioned United States, ex rel. Thams v. Cardiovascular Systems, Inc. Case No. 3:13-cv-404.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

If you know of or suspect health care fraud, contact us now.

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