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Healthcare Fraud Allegations Spur $3.2M Settlement for Providers

Recent healthcare fraud schemes involved illegal kickbacks, physician self-referral violations, and false claims submitted to public healthcare programs.

Healthcare fraud

Source: Thinkstock

By Jacqueline LaPointe

- A group of five provider organizations specializing in orthopedic surgeries or anesthesiology recently paid $3.2 million to the federal government to resolve healthcare fraud allegations involving kickbacks, the Department of Justice (DoJ) reported.

The provider organizations involved in the settlement included Georgia Bone & Joint, Southern Bone & Joint a/k/a Summit Orthopaedic Surgery Center (Summit Surgery Center), Southern Crescent Anesthesiology, PC, Sentry Anesthesia Management, LLC (Sentry), and David LaGuardia (LaGuardia).

The government accused LaGuardia, Sentry, and Southern Crescent Anesthesiology of giving Summit Surgery Center a free medical director in exchange for Summit Surgery Center performing more procedures at their center than at the Georgia Bone & Joint office.

Georgia Bone & Joint and LaGuardia also allegedly submitted false claims to Medicare for prescription drugs acquired outside of the US. The Federal Drug Administration (FDA) had not approved the drugs.

The civil settlement resolves a False Claims Act lawsuit brought on by a whistleblower. Former Practice Administrator for Georgia Bone & Joint launched the lawsuit against the orthopedic and anesthesiology organizations. She will receive a portion of the settlement.

READ MORE: How Providers Can Detect, Prevent Healthcare Fraud and Abuse

“Decisions on where and how patients’ medical procedures are performed should never be made based on thinly veiled bribes, as was alleged in this matter,” stated Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the HHS (HHS-OIG). “Such alleged schemes will be aggressively investigated and prosecuted.”

PA hospital, cardiology group pay $20.75M to settle kickback accusations

The DoJ announced in March 2018 that the University of Pittsburgh Medical Center (UPMC) Hamot and an affiliated regional physician cardiology practice agreed to pay over $20 million to the federal government. The settlement will resolve allegations that the provider organizations violated the Anti-Kickback Statute and Physician Self-Referral Law.

Medicor Associates Inc. (Medicor) is the physician cardiology practice involved in the settlement.

A former physician who worked for Medicor accused UPMC Hamot of paying Medicor up to $2 million per year to induce additional Medicor patient referrals from 1999 to 2012. The kickback payments were paid through 12 physician and administrative service arrangements designed to secure referrals, the DoJ reported.

The hospital reportedly had no “legitimate need” for the contracted services. Some of the services were also duplicative or never performed, according to the False Claims Act lawsuit.

READ MORE: Turnkey Approach to Fighting Healthcare Fraud, Waste, Abuse

A US District Court for the Western District of Pennsylvania recently found that two of UPMC Hamot’s physician and administrative arrangements violated the Physician-Self Referral Law, which prohibits hospitals and physicians from referring patients for certain healthcare services paid for by Medicare to another physician or organization with whom they have a financial relationship.

The False Claims Act lawsuit was set for trial when the federal government, UMPC Hamot, and Medicor reached a settlement.

AL doctor and co-conspirators caught in $7.8M healthcare fraud scheme

Law enforcement authorities recently charged four individuals for their involvement in a $7.8 million healthcare fraud scheme. Two of the individuals were physicians at Care Complete Medical Clinic, a private allergy and pain management in Birmingham, Alabama, the US Attorney General for the Northern District of Alabama Jay E. Town reported.

A newly unsealed indictment charged Patrick Emeka Ifediba, MD, his wife, Uchenna Grave Ifediba, and co-conspirators Ngozi Justina Ozuligbo and Clement Essien Ebio with healthcare fraud conspiracy.

The four defendants allegedly submitted millions of dollars in false claims for allergy treatments to healthcare programs for reimbursement. Authorities also charged Uchenna Ifediba with one count of false statements related to healthcare matters.

READ MORE: OIG Releases Healthcare Fraud Compliance Program Guidelines

The husband-and-wife physicians also faced charges of unlawful drug distribution conspiracy. According to the indictment, the physicians reportedly prescribed schedule II controlled substances to patients with no medical need for the painkillers. Town’s office explained that the physicians ran Care Complete Medical Clinic partly as a “pill mill.”

Patrick and Uchena Ifediba faced 14 and 5 counts, respectively, of unlawful distribution of controlled substances.

On top of healthcare fraud and drug distribution charges, the indictment also included money laundering counts against Patrick Ifediba and Ozuligbo. The pair allegedly attempted to cover up the payments from Care Complete Medical Clinic’s healthcare fraud and illegal drug distribution schemes.

“The opioid crisis in the United States accounts for the deaths of tens of thousands of Americans every year,” Town stated. “Physicians who pocket millions while taking advantage of patients, many of whom are addicted to opioids, and unnecessarily drive up healthcare costs for both patients and insurance providers, knowingly sacrifice the efficacy of care for greed.

“Physicians who engage in this illicit practice will soon be trading their white coats for prison stripes,” he added.

$11.5M settlement for TX radiation therapy company

On the heels of false claims and kickback allegations, Sightline Health LLC in Texas will pay $11.5 million to the federal government, the DoJ announced. The settlement will resolve a False Claims Act lawsuit claiming the national radiation therapy company knowingly submitted claims to Medicare that violated the Anti-Kickback Statute.

The settlement also involves Integrated Oncology Network Holdings LLC, which acquired SightLine in 2011.

Sightline reportedly paid physicians a portion of its profits through investment arrangements to induce them to refer patients to Sightline cancer treatment centers. Physicians were also able to profit from the referrals to Sightline centers.

The federal government accused the radiation therapy company of paying the kickbacks by creating leasing companies in which referring physicians could invest. Sightline allegedly shared the profits from the leasing companies with physicians who invested.

In addition to the $11.5 million settlement, Sightline and Integrated Oncology Network Holdings LLC also entered a five-year Corporate Integrity Agreement with HHS-OIG. The agreement includes internal and external monitoring of the relationships between the healthcare companies and referring physician investors, the DoJ reported.

“Companies seeking to boost profits by paying physicians kickbacks for patient referrals undermine impartial medical judgment and increase health care costs for everyone,” stated Chief Counsel to the HHS Inspector General Gregory Demske. “We will continue to investigate such illegal, wasteful business arrangements in order to protect government health programs and the patients served by them.”


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