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Provider Fraud

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Sharp HealthCare — Medicare Fraud/Kickbacks (undisclosed settlement amount)

Three of our whistleblower attorneys represented a whistleblower in a qui tam action under the False Claims Act against Sharp HealthCare, a regional hospital system in San Diego.  Our client alleged that the Sharp Healthcare Center for Research, Sharp’s clinical-trial research arm, fraudulently billed government payers in violation of “secondary payer” rules that prohibit billing the government when other payers will pay for a patient’s care. Our whistleblower client also alleged that Sharp cultivated an illegal kickback scheme to entice prospective trial sponsors to host clinical trials at Sharp by regularly undervaluing Sharp’s costs involved in managing clinical trials.  By offering below-market value incentives and billing government and commercial insurers for injuries, the lawsuit alleged that Sharp sought to increase its attractiveness to trial sponsors. Sharp’s alleged purpose was to burnish the organization’s reputation and offer a lucrative stream of income for Sharp-affiliated physicians involved in clinical trials. Sharp settled the whistleblower’s case for an undisclosed amount.  Read more here.

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 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 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. FlorenUSAO WDTex

October 29, 2019

Encompass Health Corporation (EHC), f/k/a HealthSouth Corporation, has agreed to pay $4 million to resolve of improperly billing Medicare.  According to the DOJ, between 2008 and 2012, an inpatient rehabilitation facility owned by EHC had improperly assigned low Functional Independence Measure scores on Patient Assessment Instrument forms in a bid to receive higher reimbursements from Medicare.  USAO NV

October 28, 2019

Sanford Health, Sanford Medical Center, and Sanford Clinic have agreed to pay $20.25 million and enter into a Corporate Integrity Agreement in order to resolve alleged violations of the Anti-Kickback Statute and False Claims Act.  Despite warnings by several physicians that a top neurosurgeon was illegally profiting off his use of implantable medical devices as well as performing medically unnecessary surgeries involving the devices, Sanford did nothing to stop the offender, allowing Medicare and Medicaid to continue being defrauded.  The allegations were raised by Sanford surgeons Drs. Carl Dustin Bechtold and Bryan Wellman, who will share in a $3.4 million cut of the settlement proceeds.  DOJ; USAO SD

CATCH OF THE WEEK – Osteo Relief Institutes, Pedaling Dubious Treatment for Arthritis, Tagged for Charging Medicare for Medically Unnecessary Services

Posted  10/25/19
x-ray of a knee
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...

October 18, 2019

Following a government analysis of Medicare claims data and a whistleblower's qui tam lawsuit, seven former Osteo Relief Institutes and their owners have agreed to pay more than $7.1 million to settle claims of defrauding Medicare.  The alleged fraud involved clinics in Arizona, California, Kentucky, New Jersey, and Texas billing Medicare for medically unnecessary treatments for osteoarthritis, including viscosupplementation injections and knee braces.  The whistleblower involved will receive $857,550.  DOJ

CATCH OF THE WEEK — Ophthalmology group, former CEO, and individual physicians settle fraud claims for $6.65M

Posted  10/11/19
Our latest Catch of the Week highlights the successful resolution of a whistleblower lawsuit against a Southern California eye doctor group and several individuals allegedly embroiled in a decade-long scheme to bill publicly funded healthcare programs for unnecessary eye exams.  Ophthalmology provider group Retina Institute of California Medical Group (RIC), its former CEO, several of its doctors, and other involved...
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