Yesterday, United States Attorney A. Lee Bentley, III announced that Meir Daller, M.D. has agreed to pay $3.81 million to the government to resolve allegations that he violated the False Claims Act by causing claims to be submitted to federal health care programs for laboratory tests that were not medically necessary.
During the relevant time period, Dr. Daller was a urologist practicing as part of Gulfstream Urology, which was a division of 21st Century Oncology, LLC. 21st Century is a nationwide provider of integrated cancer care services that is headquartered in Fort Myers. As part of its business, 21st Century employs and affiliates with physicians in specialty fields such as radiation oncology, medical oncology, and urology.
The settlement announced today resolves allegations that Dr. Daller submitted claims to Medicare and Tricare for fluorescence in situ hybridization, or “FISH,” tests that were not medically necessary. FISH tests are laboratory tests performed on urine that can detect genetic abnormalities associated with bladder cancer. Medicare does not consider a FISH test reasonable or necessary unless it is used to monitor for tumor reoccurrence in a patient previously diagnosed with bladder cancer or unless, after performing a full urologic workup, the physician has reason to suspect that a patient with hematuria (i.e., blood in the urine) may have bladder cancer.
Beginning in 2009, Dr. Daller began referring all of the FISH testing ordered by him to a laboratory owned and operated by 21st Century. During the relevant time, Dr. Daller ordered over 13,000 separate FISH tests on his Medicare patients, making him the number one referring physician in the country with respect to FISH tests. Dr. Daller was paid bonuses by the company based, in part, on the number of FISH tests he referred to 21st Century laboratory. During the relevant time, Dr. Daller received approximately $2 million in bonus payments from 21st Century associated with these FISH tests.
The allegations that doctors affiliated with 21st Century were ordering unnecessary FISH tests were originally brought in a lawsuit filed by a whistleblower 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 original lawsuit was captioned United States, State of Florida, ex rel. Mariela Barnes v. Dr. David Spellberg, 21st Century Oncology and Naples Urology Associates, Civil Action No. 2:13-cv-228-FtM-38DNF (M.D. Fla.).
In addition to the civil settlement, Dr. Daller has entered into a three-year Integrity Agreement with the Office of Inspector General of the United States Department of Health and Human Services. The Integrity Agreement, among other obligations, requires Dr. Daller to retain an Independent Review Organization to perform a Claims Review, as well as an Electronic Health Records Review to evaluate the appropriateness of any revisions made to the medical record after initial entry, pursuant to Medicare and Medicaid requirements.
In addition to the settlement announced today with Dr. Daller, the United States previously entered into settlements relating to similar allegations with 21st Century Oncology for $19.75 million and urologists David Spellberg, M.D. and Robert Scappa, D.O. for $1,050,000 and $250,000, respectively. As a result, the United States’ total recovery relating to the investigation of the use of FISH tests by doctor’s affiliated with 21st Century is now $24,860,000.
The whistleblower, a former medical assistant who worked for David Spellberg, M.D. at Naples Urology Associates, which was also a division of 21st Century Oncology, will receive $571,500 as her share of this recovery. This amount is in addition to a $3,437,000 million share she already received as a result of the settlements previously reached with David Spellberg, M.D, Robert Scappa, D.O., and 21st Century Oncology.
“Charging for clearly unnecessary medical services defrauds the government, threatens the viability of public health care programs, and breaches the sacred trust that physicians owe their patients,” said U.S. Attorney Bentley. “Our office will continue to pursue and hold accountable health care providers who defraud the United States.”
“Greed was the clear motive in this case,” said Shimon R. Richmond, Special Agent in Charge for the HHS Office of the Inspector General. “Patients’ needs played no role in ordering tests that were medically unnecessary and could have endangered patient care. Egregious fraud, such as alleged in this settlement, will not be tolerated. Together with our law enforcement partners, we will protect beneficiaries and the federal health care programs they rely upon.”
“The Defense Criminal Investigative Service (DCIS) continues to protect the integrity of the U.S. military health care program (TRICARE) against fraud as one of our top priorities. DCIS dedicates substantial resources to investigating both corporate and individual medical services providers who defraud the TRICARE program,” said Special Agent in Charge John F. Khin, Southeast Field Office.
The investigation was handled by Trial Attorney Arthur Di Dio from the Civil Division’s Commercial Litigation Branch and Assistant U.S. Attorney Kyle S. Cohen, with assistance from DCIS, FBI, and the Department of Health and Human Services Office of Inspector General.
