Two Northern California Urologists Agree To Pay More Than $1 Million To Settle Civil False Claims Act Allegations Related To Image Guided Radiation Therapy (IGRT) Referrals for Medicare Patients

On January 23, 2018, Drs. Aytac Apaydin and Stephen Worsham, urologists based in Northern California, agreed to a civil compromise with no admission of liability in which they will pay $1.085 million to resolve allegations that they submitted and caused the submission of false claims to Medicare for image guided radiation therapy (IGRT). 

IGRT is used to treat patients who are diagnosed with cancer, including prostate cancer patients. The government alleged that these IGRT claims were referred and billed in violation of the physician self-referral law (commonly known as the “Stark Law”) and the Anti-Kickback Statute.

The factual background according to the Department of Justice is that Drs. Apaydin and Worsham own and operate Salinas Valley Urology Associates (SVUA) in Salinas, California. They also owned Advance Radiation Oncology Center (AROC), located in Salinas, California, which dissolved in 2016.  

The United States alleged that Drs. Apaydin and Worsham knowingly caused eight urologists in Monterey and Salinas, California, (the “Lessee Urologists”) to violate the Anti-Kickback Statute and the Stark Law.  The claims settled by this agreement are allegations only; and there was no determination of liability.

Drs. Apaydin and Worsham allegedly solicited the Lessee Urologists to enter into lease agreements with AROC under which the Lessee Urologists could bill for, and thereby profit from, their referrals of IGRT performed at AROC.  The Lessee Urologists previously entered into settlement agreements pertaining to their IGRT claims, under which they collectively agreed to pay the United States $900,000. 

The United States also alleged that Drs. Apaydin and Worsham violated the Stark Law by improperly billing Medicare for their own IGRT referrals to AROC, despite the fact that AROC and SVUA were separate entities and their financial arrangements did not comply with any exceptions to the Stark Law.  

The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives.  The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.  The Stark Law forbids health care providers from billing Medicare for certain services referred by physicians who have a financial relationship with the entity performing the service, unless an exception applies.  

Attorney Commentary:

If a physician violates the Anti-Kickback Statute and/or Stark Law, the penalty is that the physician has to repay the entire claim to the government insurance program and the entire claim is deemed a “false claim.” This is why these arrangements need to be vetted by legal counsel and must be monitored by compliance counsel. That compliance at least helps keep these cases from being criminal.

Now as an attorney who sometimes says “no” to certain of these arrangements, my thinking is why would any physician want to bill and collect and then have to repay it all back or risk an employee from claiming it’s a kickback and then face a qui tam or whistleblower suit. Compliance is good business.  

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Office: 213-233-2260