Catch of the Week: Osteo Relief Institutes, Pedaling Dubious Treatment for Arthritis, Tagged for Charging Medicare for Medically Unnecessary Services

On October 18, 2019, the Department of Justice announced a settlement with arthritis treatment provider Osteo Relief Institutes and seven of its locations in Phoenix, Arizona; San Diego, California; Lexington, Kentucky; Wall Township, New Jersey; Dallas, Texas; San Antonio, Texas; and, Colorado Springs, Colorado.  According to the DOJ press release, the ORI entities, together with their principals, will collectively pay $7.13 million to resolve allegations that they submitted or caused the submission of false bills to Medicare for medically unnecessary services.  At the same time, John Rush, M.D., who owned and controlled the ORI clinics, together with the clinics and related entities and individuals entered into a 5-year Corporate Integrity Agreement.

For patients with osteoarthritis of the knees, chronic pain can limit activities, and patients are eager for effective treatments.  Injections of hyaluronic acid or other fluids into the affected joint can provide relief for patients suffering from osteoarthritis by supplementing the fluid already found in joints. Medicare covers such “viscosupplementation” treatments for patients with osteoarthritis of the knee who have not responded to other more conservative treatments.

A qui tam complaint under the False Claims Act filed in 2018 by Dr. Mark Conliffe alleges that ORI and its related doctors and entities engaged in various overbilling schemes for knee injections, including billing for such injections as diagnostic procedures subject to higher reimbursement, instead of therapeutic procedures; billing for injections that were not medically necessary, including billing platelet-rich plasma injections deemed experimental; billing for evaluation and management in association with the follow-up injection procedures; and, billing for follow-up arthrograms that were not medically necessary.

According to the allegations in the whistleblower complaint, ORI’s use of the more expensive procedure code, CPT 27370, instead of the appropriate code, CPT 20610, was particularly notable.  Medicare approved CPT 27370 reimbursement of $204.24 in 2015; CPT 20610 was reimbursed at $56.68.  In 2015, 17 of the top 25 CPT 27370 billers in the country were associated in ORI; in 2014, 18 of the top 35 CPT 27370 billers were affiliated with ORI.  The complaint includes other examples of codes for which ORI billers were top-ranked.  In addition, ORI was alleged to have provided medically unnecessary knee braces to patients.

ORI’s overbillings were not its only problems.  The DOJ press release also includes allegations that defendants “used multiple brands of viscosupplements successively on patients without clinical support, and used discounted viscosupplements reimported from foreign countries.”  ORI’s New Jersey location attracted regulatory oversight in 2017, when 41 patients developed infections after they received viscosupplementation injections.  An inspection by New Jersey health officials revealed significant lapses in proper procedures.

Analysis

Providers who provide treatment that is not only medically unnecessary, but also potentially dangerous for patients, with the goal of lining their own pockets with taxpayer funds, are committing healthcare fraud and threaten the integrity of the healthcare system.  This settlement highlights the continued efforts by DOJ to combat the delivery of medically unnecessary treatments to receive money from federal health programs. The government will continue to pursue providers that endanger patients by conducting unnecessary or improper treatments.

This settlement also demonstrates the vital role False Claims Act whistleblowers play in ensuring that improper treatment schemes come to light.  The DOJ reports that the whistleblower (who is unidentified in the DOJ press release) will receive $857,550.  While ORI doctors stood out for their higher-than-average use of particular billing codes, without information provided by insiders, the government typically lacks information connected particular billing patterns with fraudulent conduct.  Whistleblowers are often in a prime position to provide information on improper conduct by their employers, competitors, or related entities that can lead to the government’s recovery of ill-gotten gains. Such recoveries help ensure that patients do not suffer the negative effects of unnecessary treatments and that the general public does not suffer the effects of fraudulent billing on federal health programs.

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Tagged in: Catch of the Week, FCA Federal, Healthcare Fraud, Lack of Medical Necessity, Medical Billing Fraud, Provider Fraud, Whistleblower Case,