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$2.1 Million Whistleblower Settlement with Skyline Urology Resolves Allegations of Improper Unbundling Fraud

Posted  March 1, 2019

This week, the Department of Justice and Constantine Cannon LLP announced a $2.1 million settlement against Skyline Urology, at one time the largest urology practice in California. The settlement, which includes $1.85 million to the United States and $250,000 to the State of California, resolved allegations by our whistleblower client that Skyline had engaged in a systematic coding scheme to defraud Medicare and private insurers in California.

The allegations describe a type of fraud known as unbundling fraud. Many healthcare reimbursements by insurance, whether privately or publicly funded, are bundled: a single payment represents an entire basket of services that are typically provided together. At times, however, some items normally covered by a bundle may be eligible for separate, additional reimbursement.

Unbundling fraud is an abuse of those separate reimbursements. For example, a provider may properly use a modifier code to indicate that additional, unrelated services were provided at the same time as a bundled service like a surgery and that those services should be separately reimbursed. But if a provider uses that same modifier when it is not really a separate service, then it is essentially claiming a second reimbursement for services that were already reimbursed by the bundle payment.

The complaint in this case alleged that Skyline engaged in a variety of unbundling fraud by improperly and routinely coding standard Evaluation and Management (E&M) services as “separately identifiable” and claiming additional reimbursement for them.

To acknowledge the critical role he played in bringing the case forward, the whistleblower is receiving a share of $323,750 of the federal settlement, as well as a portion of the California settlement.

The whistleblower was represented by Constantine Cannon attorneys Michael Ronickher, Mary Inman, Max Voldman, and Ronny Valdes. They would like to thank the federal and California attorneys for their hard work and dedication on the case, particularly Assistant United States Attorneys Jane Andersen and Thomas Corcoran of the District of Maryland, Trial Attorney Nicholas Perros of the Department of Justice Civil Fraud Section, and Nicholas Campins, Senior False Claims Trial Attorney at the California Department of Insurance.

To read more about the settlement, view our press release, as well as the press releases of the Maryland USAO and the Department of Justice. If you have knowledge of unbundling fraud, or any other kind of fraud, and would like to speak to an experienced whistleblower attorney, please contact us.

Tagged in: Bundling and Unbundling, Healthcare Fraud, Medical Billing Fraud, Provider Fraud, Whistleblower Case, Whistleblower Rewards,