California Rehabilitation Therapy Company With 11 Skilled Nursing Facilities Settles Medicare False Claim Allegations for Alleged Unnecessary or Unreasonable Services

Qui Tam Case Involving SNFs

Skilled nursing facilities (SNFs) which offer rehabilitation therapy services have a large number of billing specific rules and regulations. The charting for the SNFs is also demanding on the staff. Issues with charting and following billing rules and regulations can create risks of audits and qui tam or false claim lawsuits for SNFs. A recent case shows how such issues play out. This case was initiated by a "whistleblower" who was a former director of rehab and will get a $360,000 payout as part of the settlement. The qui tam case is captioned United States ex rel. Pennetti v. Interface Rehab, et al., No. CV-14-4133 (C.D. Cal.).

On or about July 23, 2021, Interface Rehab (Interface), headquartered and operating in Orange County, California agreed to pay $2 million to resolve allegations that it violated the False Claims Act by causing the submission of claims to Medicare for rehabilitation therapy services that were allegedly not reasonable or necessary. The claims resolved by the settlement are allegations only and there has been no determination of liability. 
It is very common for these cases to settle since the legal and expert fees alone can cost hundreds of thousands of dollars. Worse, if the case goes to trial and the health care facility loses, the provider can be barred from Medicare. A settlement offers a certain result. However, these cases need to be fought aggressively in order to keep the settlement payments down or to get the cases dismissed if possible.  

Healthcare Partners (a Medicare Advantage Provider) to Pay $270 Million To Settle False Claims Act Liabilities

It is not only health care physicians, hospitals, medical groups, laboratories and other companies that can get sued in qui tam cases. Recently a California-based independent physician association reached a settlement in a false claims act with the government. 

The settlement came after a voluntary disclosure. While the voluntary disclosure is expensive, in the long run it is much more effective and helps ensure that the provider will not be excluded from Medicare. This settlement also resolves a whistleblower lawsuit. The claims resolved by the settlement are allegations only, and there has been no determination of liability.

HealthCare Partners Holdings LLC, doing business as DaVita Medical Holdings LLC, agreed to pay $270 million to resolve its False Claims Act liability for providing inaccurate information that caused Medicare Advantage Plans to receive inflated Medicare payments. DaVita is headquartered in El Segundo, California.

Medical Device Maker AngioDynamics Agrees to Pay $12.5 Million to Resolve False Claims Act Allegations

Medical device companies are being held responsible for false and misleading promotional claims as well as advising medical providers on what billing codes to use. A recent case shows how these cases can proceed.

On July 18, 2018, it was announced that medical device manufacturer AngioDynamics, Inc. agreed to pay the United States a total of $12.5 million to resolve allegations that the company caused healthcare providers to submit false claims to Medicare, Medicaid, and other federal healthcare programs relating to the use of two medical devices, LC Bead and the Perforator Vein Ablation Kit (PVAK). 

The claims resolved by the civil settlements are allegations only, and there have been no determinations of liability.  

AngioDynamics will pay $11.5 million to resolve allegations that the company caused false claims to be submitted to government healthcare programs for procedures involving an unapproved drug-delivery device that was marketed with false and misleading promotional claims.  

Philadelphia Personal Injury Law Firm Agrees to Start Compliance Program and Reimburse the United States for Clients’ Medicare Debts

Medicare is watching personal injury settlements and seeking to hold personal injury lawyers responsible for Medicare liens on settlements or judgment proceeds. 

On June 18, 2018, a Philadelphia personal injury law firm, Rosenbaum and its Associates, and its principal  entered into a settlement agreement with the United States to resolve allegations that they failed to reimburse the United States for certain Medicare payments the government had previously made to medical providers on behalf of firm clients who sought medical care.

The government’s investigation arose under the Medicare Secondary Payer provisions of the Social Security Act, which authorizes Medicare, as a secondary payer, to make conditional payments for medical items or services under certain circumstances. When an injured person receives a settlement or judgment, Medicare regulations require entities who receive the settlement or judgment proceeds, such as the injured person’s attorney, to repay Medicare within 60 days for its conditional payments. If Medicare does not receive timely repayment, these same regulations permit the government to recover the conditional payments from the injured person’s attorney and others who received the settlement or judgment proceeds.

U.S. Department of Justice Intervenes in Five Civil Qui Tam Lawuits in Los Angeles Accusing Insys Therapeutics of Paying Kickbacks in Form of Speaker Fees, Meals, Entertainment, Jobs, Etc. to Encourage Physicians Promote Sybsys, a Sublingual Spray Form of Fentanyl

On May 15, 2018, the United States intervened in five “whistleblower” lawsuits that have been consolidated in United States District Court in Los Angeles and accuse Insys Therapeutics, Inc. of paying illegal kickbacks and defrauding federal health programs in connection with the marketing of Subsys, an opioid painkiller manufactured and sold by the Arizona-based company.   The civil claims asserted against Insys are allegations only, and there has been no determination of liability.

The five cases brought pursuant to the False Claims Act were ordered unsealed late last week, as was the government’s complaint in intervention. The United States has separately pursued a number of criminal cases against Insys employees and Subsys prescribers.

The cases allege illegal marketing tactics related to Subsys, a sublingual spray form of fentanyl, an opioid painkiller. In 2012, Subsys was approved by the Food and Drug Administration for the treatment of persistent breakthrough pain in adult cancer patients who are already receiving, and tolerant to, around-the-clock opioid therapy.

The government’s complaint alleges that Insys paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. Many of these kickbacks allegedly took the form of sham speaker fees to physicians, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.

The United States also alleges that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and that Insys employees lied to insurers about patients’ diagnoses in order to obtain reimbursement for Subsys prescriptions that had been written for Medicare and TRICARE beneficiaries.

Florida Physician and Ex-Wife Indicted in Health Care Fraud Conspiracy For Alleged False Claims to Medicare and Blue Cross Blue Shield for Allegedly Using False Diagnoses of Rosacea, Acne, and Actinic Keratosis to Perform Chemical Peels, Dermabrasions, and Acne Surgery

The world of private insurance billing has changed in that federal and state authorities will be brought in for claims of insurance fraud. In the old days, if a claim was denied it was denied. If it was approved, that was the end of it. 

There are dermatology and plastic surgery physicians who understand what procedures are covered (rhinoplasty due to deviated septum/sleep issues, laser treatments for serious rosacea or acne scars, etc.)where those procedures will also improve appearance.  There are other patients and physicians who push the envelope to create a diagnosis in order to get insurance reimbursement.  

The issue is where is the line? How far should doctors go to help patients get insurance coverage for cosmetic treatments? In today's world, a recent case can show the legal issues present when patients' insurance is billed for for cosmetic procedures.

Walgreen Paid $9.86 Million to Settle False Claim Allegations of Improper Medi-Cal Billings for Code 1 Drugs

It's not just small pharmacies that get false claims (qui tam) cases. The chains are ripe targets for cases but they have the resources to defend, pay settlements and stay in business. A recent case shows that even large pharmacies will settle rather than go to trial in these cases.

On April 20, 2017, Walgreens paid $9.86 million to resolve civil lawsuit allegations that it violated the federal False Claims Act when it knowingly submitted claims for reimbursement to California’s Medi-Cal program for Code 1 Drugs that were not supported by applicable diagnosis and documentation requirements. There were no admissions. 

This settlement surrounded the nuances of pharmacy billing for Medi-Cal. Medi-Cal utilizes a formulary list, commonly known as “Code 1” drugs, which designates certain restrictions for each listed drug, including restrictions pertaining to diagnoses. Medi-Cal will reimburse certain Code 1 drugs only for approved diagnoses, taking into account criteria such as the drug’s safety, efficacy, misuse potential, and cost. Pharmacies confirm and certify that these Code 1 drugs are dispensed for the approved diagnoses. Walgreens may bill for drugs prescribed outside of the approved diagnoses, but it must submit a request to DHCS that includes a justification for the non‑approved use (often called a TAR).

California Oncology Therapy Center Pays $2.8 Million to Resolve Allegations of Providing Radiation Treatments Without Radiation Oncologist Present

The nuances of "incident-to" billing and the alleged lack of physician supervision from 2006 to 2015 at one of its locations is at the heart of a false claims settlement between Valley Tumor Medical Group Oncology and the United States. The case is United States ex rel. Shindler v. Valley Tumor Medical Group, et al., CV 15-2249.

Valley Tumor paid $2,865,693 to the United States and $134,307 to the State of California on April 13, 2017 to resolve allegations in the lawsuit that it submitted fraudulent bills to the Medicare, Medi-Cal and TRICARE programs when it did not have the required supervision at its Ridgecrest location (which is now closed).  

California Oxygen Equipment Provider Pays $11.4 Million To Resolve Allegations of False Claims and Cross-Referral Kickbacks With Sleep Clinics

On April 25, 2017, Braden Partners, L.P., doing business as Pacific Pulmonary Services,  a DME based in California, has agreed to pay $11.4 million to resolve allegations against it and its general partner, Teijin Pharma USA LLC, to resolve a False Claims Act (qui tam) lawsuit filed in federal court in San Francisco.  

The lawsuit resolved by the settlement contains allegations only and there has been no admisison of liability. 

Pacific Pulmonary Services is a DME home medical business and provides stationary and portable oxygen tanks and related supplies, and sleep therapy equipment, such as Continuous Positive Airway Pressure, Bilevel Positive Airway Pressure masks and related supplies, to patients’ homes in California and other states.  

The qui tam lawsuit was originally filed by Manuel Alcaine, a former sales representative of Pacific Pulmonary Services. The government intervened and took over the action, as it did in this case.  In this case, Mr. Alcaine will receive a hefty $1,824,000 of the settlement funds. This is why compliance plans are needed since former employees can file a lawsuit any alleged wrongdoing and profit from it instead of having to report it to the company before they quit or are terminated.  

Los Angeles Dermatologist Pays $2.6 Million to Resolve False Claim Allegations He Billed Medicare for Unnecessary Mohs Skin Cancer Surgeries

On April 10, 2017,  Dr. Norman A. Brooks, M.D., the owner of The Skin Cancer Medical Center in Los Angeles paid the United States $2,681,400 as part of a settlement to resolve allegations that he submitted bills to Medicare for Mohs micrographic surgeries for skin cancers that were medically unnecessary. In settling the case, Dr. Brooks did not admit liability in the matter.

As part of the settlement, Dr. Brooks and his entity entered into a three-year Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General. Under the Integrity Agreement, Dr. Brooks will establish and maintain a compliance program that includes, among other things, mandated training for him and his employees and review procedures for claims submitted to Medicare and Medicaid programs.

The settlement resolves allegations made in a lawsuit filed by Dr. Brooks' former Brooks employee Janet Burke under the qui tam, or “whistleblower,” provisions of the False Claims Act, which permit private parties to sue on behalf of the government and receive a share of any recovery. For her role in the case, Ms. Burke will receive $482,652.

          

The lawsuit alleged that Brooks falsely diagnosed skin cancer in some of his patients so that he could perform, and bill for, Mohs surgeries. Mohs surgery is a specialized surgical procedure for removing certain types of skin cancers in specific areas of the body, including the face. The surgery is performed in stages during which the surgeon removes a single layer of tissue which undergoes a microscopic evaluation. 

The surgeon performs additional stages, if necessary, until all of the cancer is removed. Given the complexity and time required to perform the procedure, Mohs yields a higher Medicare reimbursement than other procedures used to remove skin lesions.

Dermatology is under greater scrutiny by government billing programs (Medicare, TriCare, etc.) and we have seen an increased rate of audits. A compliance plan is never too late to start and can help prevent whistleblower cases when a practice self-reports or discovers the employee's allegations during employment or at an exit interview.

Posted by Tracy Green, Esq.
Email: tgreen@greenassoc.com
Work: 213-233-2260

California Sleep Clinic Agrees To Settle False Claims Case for Billing Medicare for Diagnostic Sleep Tests. Pays $2.6 Million Fine and Loses Provider Numbers for 3 Years.

Diagnostic sleep studies have been under scrutiny and audit by Medicare and private insurers for the past 5 years. Recently, a false claims civil lawsuit resulted in a large settlement by a California sleep diagnostic clinic. 

One requirement of this recent civil settlement was that the business lose its provider numbers and not be allowed to re-enroll for 3 years. That essentially closes the business and does not allow it to be sold to a third party. Essentially, this shows the government decided it wanted this provider out of the program. 

On December 28, 2016, Bay Sleep Clinic, its related businesses — Qualium Corporation and Amerimed Corporation — and their owners and operators, Anooshiravan Mostowfipour and Tara Nader agreed to pay $2.6 million to settle allegations that they fraudulently billed the Medicare program. The claims resolved by this settlement are allegations only and there has been no determination of liability.

The allegations against the Defendants were set out in an amended False Claims Act complaint filed by the United States on August 8, 2016. According to the complaint, California residents Mostowfipour and Nader own Amerimed Corporation (that was doing business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialists) and Qualium Corporation, which operated twenty sleep clinics doing business as Bay Sleep Clinic.  

The government alleged that as early as April 2002, Mostowfipour, Nader, and their businesses fraudulently billed Medicare for sleep tests performed by technicians lacking the licenses or certifications required by Medicare payment rules.  It was also alleged that there was billing to Medicare for sleep tests that allegedly were conducted at unenrolled and unapproved locations.  

Specifically, the government alleged that defendants regularly falsified documents to make it appear that a sleep test had been given at one of the two Medicare-approved locations when, in fact, the test had been conducted at another, unapproved facility.  

Eyeland Optical Centers Settles Civil False Medicaid Claims Case For Billing for More Than 4 Lenses Per Year and Not Self Reporting

On December 6, 2016, Eyeland Optical Centers, a chain of eye care centers in Pennsylvania settled allegations under the False Claims Act with the U.S. Attorney's Office.  

The settlement resolves allegations that Eyeland had billed Medicaid for more than four lenses per year, in violation of Pennsylvania’s Medicaid regulations, and retained those payments even once it became aware that it had done so. This type of billing happens when patients lose glasses or break them but there are limits on what state programs pay for in order to avoid abuse.

The self-reporting rules in the OIG's Civil Monetary Penalties (CMP) Law are beginning to be enforced more aggressively.  The CMP law requires that overpayments must be reported and returned within sixty days of the date that the overpayment was identified or that a related cost report was due (whichever is later). The default penalty for this type of violation is $10,000 per item or service. 

In addition, computerized or "big" data is being used to identify billing irregularities or violation of billing rules. This case shows how this failure to self-report was used as evidence in the false claims case and how easy it was for the government to use big data to identify billing for services not allowed. Eyeland has agreed to pay $135,328.56 to resolve these claims.  

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law
Office: 213-233-2260
Email: tgreen@greenassoc.com

Owner Of New Jersey Mobile Diagnostic Testing Facility Sued For Submitting Claims To Medicare for Cardiologist Who Was on Pre-Payment Review

A recent federal criminal and civil qui tam case relate to a Medicare provider billing for services provided by another provider who was on pre-payment review. 

Pre-payment review is also called "paper billing" and is ostensibly designed to ensure that doctors or providers submit claims within established rules and regulations, and which required them to submit documentation, including medical records, to support the services being billed to Medicare. 

Under pre-payment review, claims for reimbursement that do not have the documentation necessary to support the services being billed are rejected by the Medicare contractor. When a provider is placed on pre-payment review, it is often the death knell for a health care business since collections grind to a halt and often legitimate claims are denied or rejected for arbitrary reasons. It used to be used to train providers but it is now often used as a way to shut down a provider's Medicare practice.

In this recent case, a cardiologist decided to find a way around the pre-payment review limitations which brought this civil case and a criminal case. On December 6, 2016, Vijay Patel of New Jersey, and his business Mobile Diagnostic Testing of NJ LLC were named in a civil federal qui tam lawsuit for allegedly knowingly submitting false claims to Medicare for thousands of diagnostic testing services they did not render.  

The civil complaint alleges that Vijay Patel had an associate who was a cardiologist and also a Medicare provider. It is alleged that from around 2009 through 2012, the cardiologist was on “pre-payment review.”  What happened is that instead of the cardiologist submitting the claims, from August 2011 through December 2012, Mr. Patel's entity and his brother's entity (Biosound Medical Services Inc. ) submitted the cardiologist's claims as if these entities had performed them instead of the cardiologist. 

Hospice Care Provider Settles False Claims Lawsuit Involving Allegations that Hospice Paid Doctor for Referrals By Donating To Doctor's Charity

On December 2, 2016, Vitas Health Corporation Midwest and related entities agreed to pay $200,000 to resolve allegations that they violated the False Claims Act and the Anti-Kickback Statute by paying Dr. Farid Fata for patient referrals to its hospice care services.

In an earlier unrelated criminal matter, Dr. Fata pleaded guilty to health care fraud, conspiracy to pay and receive kickbacks and promotional money laundering, and was sentenced to a term of 45 years in prison. 

The allegations in the civil False Claims Act suit were brought to the government by a whistleblower, known as a relator, under the qui tam provisions of the False Claims Act. 

From November 2012 to January 2014, relator Rita Dubois worked at Vitas as the Director of Market Development in Southeastern Michigan. Ms. Dubois’s complaint alleged that from mid-2012 through early 2014, Vitas contributed $15,750 to the Swan For Life Cancer Foundation, which was a cancer charity that Fata established. 

In return, Fata referred 23 patients to Vitas for hospice care, the complaint alleges. The U.S. intervened in the lawsuit.  Ms. Dubois will receive $36,000 out of the $200,000 settlement for her role in filing the qui tam action.

This case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Health and Human Services, Office of Inspector General.

Attorney Commentary: This is one of the cases where when payments are made to third parties they are deemed to be illegal referral fees. Given that Dr. Fata's criminal case seems extensive and resulted in a long sentence, this was probably a small part of the allegations in the doctor's case. The case against the hospice was not criminal, however, this qui tam case shows that payments to a doctor or his related entities must be viewed carefully and run by compliance counsel. 

The conflict of interest in donating to a doctor's charity create the appearance of payment for referrals. The payment of $200,000 is far less than the costs of trying the lawsuit and the risks of losing so it makes good business sense but it is far better to avoid such situations. 

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Email: tgreen@greenassoc.com
Phone: 213-233-2260

Nursing Home Physicians, Be Careful. Illinois Psychiatrist Pays $908,000 to Settle Civil Allegations of False Billing for Evaluation and Management Services. 10 Year OIG Exclusion Part of Settlement.

On November 8, 2016,  a Springfield psychiatrist, Duttala Obul Reddy, settled allegations of false billing for services provided to nursing home residents in central Illinois.  The false claims lawsuit filed by the government alleged that from January 2008 through February 2013, Dr. Reddy allegedly submitted bills for evaluation and management services provided at long-term care facilities that either had not been provided or had not been provided to the extent claimed. 

Under the terms of the settlement agreement, Dr. Reddy denies the allegations that he submitted or caused submission of false claims for payment under Medicare and Medicaid for medical services. The terms of the settlement required Dr. Reddy to pay $908,000 and to agreed to his exclusion from participation in Medicare, Medicaid and all other federal health care programs for a period of 10 years. The settlement had the U.S. District Judge Myerscough enter judgment in favor of the government and against Dr. Reddy.

Attorney Commentary: Physicians who work at nursing homes are held to the same standards as private practitioners in billing. This particular psychiatrist had issues with the state licensing board due to alleged boundary violations and that may have triggered these audits. While nursing home visits may result in billing on a regular schedule, it is critical for doctors to ensure that visits are only billed if they occurred and to be very careful to avoid upcoding. The type of OIG exclusion that occurred in this case can be detrimental to a career given the pervasiveness of government funding of health care in hospitals, nursing homes and insurance.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Email: tgreen@greenassoc.com
Phone: 213-233-2260

New Jersey OB/GYN Settles Civil Allegations on Pelvic Floor Therapy Claims, Pays $5.25 Million and Agrees to 20-Year OIG Exclusion

On November 15, 2016, a New Jersey OB/GYN, Labib Riachi, agreed to be excluded from participation in Federal health care programs, including Medicare and Medicaid, for 20 years to settle allegations by the U.S. Department of Health and Human Services, Office of Inspector General (OIG), that Dr. Riachi submitted thousands of claims for Pelvic Floor Therapy (PFT) to Medicare and Medicaid for services that were either never provided or were otherwise false or fraudulent. 

Dr. Riachi's exclusion follows a Qui Tam or False Claims Act (FCA) settlement agreement with the U.S. Attorney's Office for the District of New Jersey for false billing. On February 12, 2016, Dr. Riachi agreed to resolve his FCA liability for $5.25 million. In resolving this matter through settlement, Dr. Riachi has denied any liability.

California and Nevada Ortho Clinics to Pay $2.39 Million to Settle Civil Allegations of Improperly Billing Federal Health Care Programs for Reimported Osteoarthritis Injection Medications (Viscosupplements)

Medical offices often purchase medical devices or medications that are sold all over the world. The same product essentially will be far cheaper in Canada, France, Israel, Mexico or other countries. However, if it is not sold and approved by a U.S. company -- and covered by that company's product liability insurance and registered with the Food and Drug Administration (FDA) -- then it is NOT an approved medical device or medication.

There are many pharmacies and supply companies which sell imported devices or medications from foreign countries and the physicians or office managers do not realize that even though it is labeled the same - that an imported medication or device cannot be billed to a government program or private insurance.  For example, some years ago, we handled a number of cases here in California and Nevada where OB-GYNs bought IUDs (Copper T-380s) that were made outside the United States and were not licensed by Paraguard. There were audits by the state Medicaid programs and the doctors or clinics had to reimburse the programs and notify the patients that these were non-FDA approved devices.  None of the clients we represented had any bad outcomes, but the chain of custody is unknown and there are risks.

A couple of weeks ago in early October 2016, three orthopedic clinics agreed to settle federal and state False Claims Act allegations that they knowingly billed federal and state health care programs for reimported osteoarthritis medications, known as visco-supplements in a case out of Sacramento, California. Viscosupplements, such as Synvisc, Orthovisc, and Euflexxa are injections approved by the FDA for the treatment of osteoarthritis pain in the knee. Viscosupplements are reimbursed by Medicare, Medicaid and other federal health care programs at a set rate based on the average sales price of the domestic product.

Respironics to Pay $34.8 Million in Qui Tam Case for Allegedly Paying Kickbacks in Form of Free Call Center Services to DME Suppliers That Bought Its Masks for Sleep Apnea Patients

On or about March 23, 2016, a national medical supply company Respironics Inc., based in Pennsylvania, agreed to pay $34.8 million to resolve alleged False Claims Act violations for paying alleged kickbacks in the form of free call center services to durable medical equipment (DME) suppliers that bought its masks for patients with sleep apnea.  

Respironics will pay roughly $34.14 million to the federal government and roughly $660,000 to various state governments based on their participation in the Medicaid program. 

The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE.  Claims submitted to these programs in violation of the Anti-Kickback Statute are also false claims under the False Claims Act.

The United States alleged that Respironics violated the Anti-Kickback Statute and the False Claims Act by providing free services to DME suppliers to induce them to purchase Respironics masks that treat sleep apnea.  Respironics allegedly provided DME companies with call center services to meet their patients’ resupply needs at no charge as long as the patients were using masks that Respironics manufactured; otherwise, the DME companies would have to pay a monthly fee based on the number of patients who used masks manufactured by a competitor of Respironics.  

The government alleged that the conduct began in April 2012 and continued until November 2015. The settlement resolves a lawsuit originally brought by Dr. Gibran Ameer, who has worked for different DME companies, under the qui tam provisions of the False Claims Act.  The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery.   Under the civil settlement announced today, Dr. Ameer will receive $5.38 million out of the federal share of the recovery.

Posted by Tracy Green, Esq.
Email: tgreen@greenassoc.com

Office: 213-233-2260

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Florida Pain Medicine Clinic and its Owners Agree to Settle Qui Tam Case Involving Allegedly Medically Unnecessary Nerve Conduction Velocity Tests

Nerve conduction studies (NCS) or nerve conduction velocity tests (NCV) have been a source of Medicare audits in California and Florida for years. Medical necessity is the usual basis for the audits but in this case, a billing employee brought a whistleblower lawsuit and the U.S. intervened.   

In a recent case, a civil qui tam case was settled on April 13, 2016 involving the billing of NCS procedures to Medicare and alleged violations of the False Claims Act. The case is United States ex rel. Gomez v. Florida Pain Medicine Associates, Inc., et al., Case No. 13-80856 CIV (S.D. Fla.).  

The allegations in the case were originally brought by Rosa Gomez under the qui tam, or whistleblower provisions of the False Claims Act. She sued Florida Pain Medicine Associates, Inc. (Florida Pain Medicine) and its owners, Drs. Bart Gatz, Alexis Renta, and Albert Rodriguez. Ms. Gomez had worked in Florida Pain Medicine’s billing department. The United States intervened in this case and took over primary responsibility for litigation. 

Ms. Gomez (and then the United States) alleged that patient records indicated that a substantial percentage of the NCSs that were performed at Florida Pain Medicine were medically unnecessary. It was alleged that the NCSs were often administered without an accompanying electromyography (EMG) test, thereby substantially decreasing the diagnostic value of the procedure. It was contended that this was especially true where the NCS was the sole basis for performing an epidural steroid injection. Florida Pain Medicine denied these allegations.

Ultimately, like many qui tam cases, the cases settled without any admission of liability. Florida Pain Medicine and its owners agreed to pay $1.1 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary nerve conduction studies (NCS).  The claims settled by the lawsuit are allegations only and there has been no determination of liability. Ms. Gomez will receive $242,000 as her share of the proceeds.

Attorney Note: One of the most important reasons for self-disclosure and compliance plans (including exit interviews) is to avoid the whistleblower lawsuits. In many cases, former employees are rushing to qui tam plaintiff attorneys to find grounds for filing cases. Although disclosure can seem painful and not necessary, the interest in employees seeking a payday in qui tam cases, even where the facts are weak, is an expensive and time consuming process. 

Posted by Tracy Green, Esq.
Email: tgreen@greenassoc.com
Contact: 213-233-2260