There have been several noteworthy False Claims Act (FCA) settlements in the second quarter of 2023. 

Four of these settlements have come in over $20 million. This post summarizes key settlements of interest.

Physicians and Healthcare Practices

On April 24, a doctor agreed to pay $7.96 million to resolve allegations that he and the pharmacy owned by his wife submitted false claims to the federal Workers’ Compensation Program as a result of a scheme through which they sent federal employees unwanted, unnecessary and costly medications by mail. The doctor also allegedly received kickbacks for his referrals to the pharmacy.

On April 28, a plastic surgeon, his son, medical practices, and billing company agreed to pay $23.9 million to resolve allegations that, among other things, they falsified the place of service for skin grafts to maximize reimbursements and billed multiple times for single-use products. As part of the settlement, the surgeon and one of his medical practices agreed to a voluntary exclusion from federal healthcare programs for 15 years, while the surgeon’s son agreed to an exclusion for three years.

On May 25, a vascular surgeon agreed to pay up to $43.419 million to resolve allegations that he defrauded federal healthcare programs. The surgeon was alleged to have falsely billed for (1) the placement of multiple vascular stents in the same blood vessel and (2) arterial thrombectomies based on occlusions that were not actually present. He allegedly prepared inaccurate medical records to justify the billing and billed for “unbundled” services that should have been billed together. As a result of a plea agreement in the related criminal proceeding, the surgeon was sentenced to 80 months in prison.

Hospitals

On April 17, a hospital and its parent health system agreed to pay $5 million to resolve allegations that the hospital violated the Stark Law by billing Medicare for services referred by ten cardiologists, who over three years received compensation that exceeded fair market value. The hospital and health system self-disclosed the allegations to the United States.

On May 12, a hospital agreed to pay $12.5 million to resolve allegations that it erroneously submitted claims for urgent care services but at a higher rate of service.

On May 31, a group of hospital systems agreed to pay $29.7 million to resolve allegations that over three years, they provided the services of mid-level practitioners to 13 physicians at no cost or below fair market value, in violation of the AKS. The government alleged the physicians were chosen due to their large number of patient referrals.

On June 15, a nonprofit health system agreed to pay $36.5 million to resolve allegations that it violated the FCA, the Stark Law and the AKS by making payments to orthopedic surgeons tied to the value or volume of the surgeons’ referrals.

Other

On April 4, a laboratory company agreed to pay $5.9 million to resolve FCA allegations that it paid volume-based commissions to third-party marketers in violation of the AKS and submitted claims to federal healthcare programs for unnecessary drug tests. In a parallel proceeding, the company also entered into an 18-month Deferred Prosecution Agreement with the Western District of Texas to resolve a criminal investigation of the same conduct.

On April 21, a durable medical equipment (DME) provider agreed to pay $5.3 million to resolve allegations that it violated the FCA by submitting claims to federal healthcare programs for non-invasive ventilators when patients actually received BiPAP machines, which cost thousands of dollars less per year. The settlement also resolved allegations that the DME company continued billing federal healthcare programs for equipment after patients stopped using them and double-billed for some ventilator rentals.

On June 15, two compounding pharmacies and their owner agreed to pay at least $7.4 million to resolve allegations that they violated the FCA by adding the antipsychotic drug aripiprazole to compounded topical pain creams to increase reimbursements and by routinely waiving patient copayments to induce patients to accept the pain cream prescriptions. The settlement amount was based on the defendants’ ability to pay.

For more information about False Claims Act settlements, check out our Healthcare Fraud & Abuse Resource Center, where you can access a searchable database of False Claims Act settlements from the last decade.