On Wednesday, June 7th, 2017, the Department of Justice announced that Texas-based Union Treatment Center (UTC) will settle allegations of civil health care fraud for $3 million, and will be permanently excluded from federal health care programs. The allegations, brought under the qui tam provision of the False Claims Act, state that UTC improperly billed the Department of Labor’s Office of Workers’ Compensation Programs for workplace injuries. As a company that marketed itself as a specialist in treating workplace injuries, UTC reportedly sought to maximize payments from the Federal Employees’ Compensation Act (FECA) program by billing for services that never took place, overcharging for medical examinations, falsifying the time patients spent in therapy, and charging for unnecessary services and supplies. UTC was also accused of a comprehensive kickback scheme in exchange for patient referrals. The settlement partially resolves the False Claims Act lawsuit, and the qui tam relator’s compensation remains to be announced.
On Friday, June 2nd, 2017, the Department of Justice announced that Fredericksburg Hospitalist Group (FHG) and 14 of its member shareholders will pay $4.2 million to settle allegations of violating the False Claims Act through fraudulent billing. According to the whistleblower complaint, FHG deliberately upcoded evaluation and management (E&M) codes to their highest levels prior to submitting the claims to Medicare and other federal health insurance programs. The DOJ asserts that the fraudulent practices unnecessarily inflated the amount of money reimbursed to FHG from federal healthcare payors. The qui tam relator’s percentage of the whistleblower settlement has not yet been disclosed.
On Thursday, June 1st, 2017, the Department of Justice announced that electronic health records vendor eClinicalWorks (ECW) and various employees will pay $155 million to resolve alleged False Claims Act violations of misleading government agencies on the extent of the software. The settlement additionally addresses allegations that ECW provided kickbacks to certain customers for promoting the service. The suit alleges that ECW sought to qualify for financial incentives by achieving certification from the Department of Health and Human Services, but the software was designed only to pass specific components of the HHS test and not to comply with the entirety of HHS regulations. Other alleged inaccuracies of the service affected user action records, diagnostic imaging orders, drug interaction tests, and the abilities of healthcare providers to transfer patient data to other electronic health records vendors. The qui tam relator, a former employee of the New York City Division of Health Care Access and Improvement, will receive approximately $30 million as a share of the whistleblower recovery.
On Tuesday, May 30th, 2017, the Department of Justice announced that Freedom Health Inc., its related corporate entities, and its former COO will pay a total of $32.5 million to settle allegations of illegal schemes designed to extract additional money from the government through their Medicare Advantage programs. The alleged schemes, both violations of the False Claims Act, included inflating CMS reimbursements by submitting unsupported diagnosis codes, and attempting to expand Freedom Health into new counties and states by misleading CMS of the scope of the Freedom Health networks. The former COO, Siddhartha Pagidipati, will pay $750,000 to resolve allegations of his role in the latter scheme; the whistleblower share for the relator, a former Freedom Health employee, remains to be determined.
On Thursday, May 18th, 2017, the Department of Justice announced that two Southwest Missouri hospitals have agreed to pay $34 million to settle alleged False Claims Act violations involving improper financial relationships between the hospitals and referring physicians. According to the DOJ, Mercy Hospital Springfield f/k/a St. John’s Regional Health Center, and its affiliate, Mercy Clinic Springfield Communities f/k/a St. John’s Clinic, would compensate oncologists in part for referring chemotherapy patients to the hospitals’ infusion center, and subsequently submit false claims to Medicare for those services. The DOJ claims that the illegal financial benefit for referring physicians can skew doctors’ incentives in favor of overuse of services, and subsequently drive up healthcare costs. The false claims relator, a physician employed by the hospital system, will receive $5,440,000 from the settlement.