Healthcare Fraud

November 26, 2019

Boston Heart Diagnostics Corporation will pay $26.7 million to resolve claims that it paid illegal kickbacks to physicians who referred laboratory tests to the company.  Boston Health provided laboratory testing to hospitals in Texas in exchange for per-test payments from the hospitals.  In order to secure more referrals from the hospitals' doctors for its testing services, Boston Health set up "management service organizations" which made payments to referring physicians.  Although these physician payments were disguised as investment returns, they were actually based on, and were provided in exchange for, the physicans' referrals.  In addition, Boston Heart was alleged to have provided other remuneration to referring physicians, including the provision of in-office dieticians, and to have waived patient co-payments and deductibles.  The settlement resolves two different cases brought by  whistleblowers, who will receive $4.36 million from the settlement.  DOJ

November 22, 2019

Ave Maria Family Practice PLLC and its principal, Dr. Dorothy Agbafe-Mosley, have agreed to pay $1.25 million to the State of North Carolina to resolve claims that they falsely billed the state's Medicaid program for addiction treatment services allegedly provided to Medicaid beneficiaries.  In fact, the services were not medically necessary, had no supporting clinical documentation, or were otherwise performed in violation of Medicaid policy.  NC

November 19, 2019

Clinical laboratory LabTox, LLC, will pay $2.1 million to resolve claims that it falsely billed Medicare and Kentucky's Medicaid program for qualitative urine drug screens as high complexity screens when, in fact, LabTox performed only low complexity testing, and wrongfully billed Medicare for un-covered specimen validity testing.  USAO ED KY

November 15, 2019

California healthcare system Sutter Health, its hospital the Sutter Memorial Center Sacramento, and the Sacramento Cardiovascular Surgeons Medical Group, Inc., will pay a total of $43.12 million to resolve allegations that the entities violated the Stark Law and improperly double-billed Medicare.  Specifically, Sutter Memorial will pay $30.5 million to resolve charges of wrongfully billing Medicare for services referred to the hospital by Sac Cardio, with whom the hospital maintained improper financial arrangements that overcompensated the Sac Cardio physicians.  In addition, Sutter will pay $15.12 million to resolve allegations that it paid physicians compensation at rates that exceeded fair market value, leased office space to them at below-market rates, and reimbursed them for expenses at inflated rates.  In addition to the Stark Law violations, the settlement also resolved allegations that Sac Cardio submitted duplicative bills for physician assistant services (Sac Cardio will pay $500,000 to resolve these claims), and allegations that several Sutter ambulatory surgical centers had double-billed Medicare for radiological services that had actually been provided, and billed for, by a separate entity.  DOJ reported that allegations against Sutter Memorial and Sac Cardio were first made in a qui tam lawsuit brought by Laurie Hanvey, who will receive $5.9 million from the settlement, and that Sutter Health self-disclosed other conduct at issue in the settlement. DOJ; USAO ED Cal; USAO ND Cal

November 15, 2019

Pharmaceutical manufacturer Lupin Limited and related entities, together with company executives Vinita Gupta and Robert Hoffman, will pay $63 million to Texas to resolve claims under the Texas Medicaid Fraud Prevention Action that they reported inflated drug prices to the state's Medicaid program in order to receive excess reimbursements.  The investigation of Lupin was initiated by a whistleblower lawsuit filed by Expess Med Pharmaceuticals, Inc.  TX

November 14, 2019

Following a guilty plea in 2018, Sandra Haar was sentenced to five years in prison and has agreed to sell 13 properties, including former clinic properties, to resolve civil claims under the False Claims Act that she and the non-profit provider of health and dental services she ran, Horisons Unlimited, submitted fraudulent claims to Medi-Cal, including claims for services rendered by unlicensed providers, claims for services that were not rendered at all, and claims for unnecessary services. Haar was also alleged to have received thousands in kickbacks from a laboratory in exchange for sending Horisons patients to the lab. Haar will be excluded from Medicare participation for 20 years; the former Horisons CFO, Norman Haar, will be excluded for 15 years.  USAO ED Cal

November 13, 2019

Vibra Healthcare, LLC and related entities, which operate freestanding acute medical rehabilitation hospitals and long term acute care hospitals nationwide, will pay $6.25 million to resolve allegations that Highlands Rehabilitation Hospital in El Paso, Texas, which was operated by Vibra, submitted false claims to Medicare.  Specifically, Vibra was alleged to have billed for services that did not meet conditions of payment, including requirements that inpatient rehabilitation facilities provide an intensive level of services to patients.  The case was initiated by a qui tam complaint filed by Thomas A. Floren.  USAO WDTex

November 13, 2019

The Louisiana Department of Health, which manages Louisiana’s Medicaid program, will pay $13.42 million to the federal government to resolve allegations that the state submitted false claims for federal share reimbursement of state Medicaid expenditures for long-term nursing care and hospice care.  The federal government alleged that in anticipation of a reduction in federal payments for such services, the state agency directed its healthcare contractor, Molina Medical Solutions, to pre-bill for nursing home and hospice services in order to receive funds at the existing higher rates.   DOJ

November 8, 2019

Lenox Hill Hospital and its corporate parent, Northwell Health, Inc., have agreed to pay $12.3 million for violating the Stark Law and False Claims Act in submissions to Medicare.  From 2013 to 2018, Lenox Hill paid the chair of its urology department, Dr. David Samadi, a salary and bonus that improperly took into account the value of his referrals and grossly exceeded fair market value.  In an effort to maximize revenue-generating surgeries, Samadi was repeatedly scheduled to perform overlapping surgeries, leaving patients with unsupervised medical residents in violation of both hospital and Medicare rules.  The department also billed Medicare for minor procedures performed in operating rooms with an unnecessarily full operating room staff.  USAO SDNY