The complaint alleges that Modern Vascular’s founder Yury Gampel pressured doctors providing services at the OBLs to "perform invasive procedures on as many referred patients as possible."  The complaint also alleges that the company’s OBLs treated patients based upon which procedures received the highest Medicare reimbursement and without regard to medical necessity.  The complaint focuses, in large part, on the opening of a Modern Vascular clinic in San Antonio in 2019.  The complaint describes a conference call held by Mr. Gampel that included 16 potential podiatrist investors where he explained the terms of the investment, promised the participants that the investment was lawful and that an initial $15,000 investment would yield in excess of $1 million in profits in less than five years. Gampel also allegedly told the potential investors they would receive “as much as $80,000 to $100,000 per year” in profits distributions in exchange for their initial $15,000 investment for a 2% equity stake in an OBL.  The complaint also states that “Gampel repeatedly explained to the San Antonio potential investors that this was not a passive investment, and that the money they were investing was not important, but that the only important thing was that the investors refer patients and influence other doctors to refer patients to the OBL...” 

OBL physician investment remains common, and is growing in popularity as a means for physicians to ensure that their patients receive timely, cost-effective and convenient outpatient care instead of seeking treatment in a hospital outpatient department or surgery center.  OBLs typically are either organized as a department of a physician’s medical practice, or as an independent freestanding OBL clinic.  OBLs operating as freestanding clinics that are owned by physicians attempt to ensure that their ownership structure satisfies the elements of the Investment Interest Safe Harbor under the federal Anti-Kickback Statute (AKS).  The AKS is a criminal statute that prohibits the exchange, or offer to exchange, of anything of value in an effort to induce or reward the referral of federal health care program business. The Office of Inspector General (“OIG”) has adopted safe harbors to protect certain business and financial practices and relationships from criminal and civil prosecution.  Failure to satisfy all of the elements of a safe harbor does not necessarily make a specific ownership structure, conduct or a practice illegal, but instead makes it subject to increased scrutiny and individualized review.  There are eight elements to the Investment Interest Safe Harbor, some of which many OBLs have difficulty satisfying:

The complaint alleges that various elements of the safe harbor were not satisfied, that Modern Vascular would condition continued ownership upon a physician’s referral of patients to an OBL and that profits distributions were outsized and not commensurate with a physician’s pro-rata ownership interest in an OBL.

This lawsuit follows on the heels of another recently unsealed qui tam relator lawsuit against Fresenius and its vascular access affiliate Azura, which makes similar allegations to those contained in the Modern Vascular complaint.  In the Fresenius lawsuit, two relator physicians allege that Fresenius centers provided medically unnecessary care and regularly entered into unlawful arrangements with nephrologists in order to secure patient referrals for Fresenius’ dialysis centers, and that Fresenius entered into unlawful arrangements with physician referral sources in violation of federal fraud and statutes.  There have been other governmental investigations and settlements in the OBL space implicating similar theories of violations of federal fraud and abuse laws, including against Philadelphia-based Vascular Access Centers L.P. and 23 affiliates that resulted in that company entering into a settlement with the Department of Justice where it agreed to enter into a corporate integrity agreement and pay $3.825 million to resolve claims that it violated the False Claims Act by billing Medicare for non-reimbursable vascular access procedures.