Investigations Newsletter: Chiropractor Agrees to Pay $2.6 Million and to 10-Year Exclusion from Federal Health Care Programs

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The owner of Campbell Medical Clinic in Houston and her medical group agreed to resolve fraudulent billing allegations for $2.6 million.

Chiropractor Agrees to Pay $2.6 Million and to 10-Year Exclusion from Federal Health Care Programs

The owner of Campbell Medical Clinic in Houston and her medical group agreed to resolve fraudulent billing allegations for $2.6 million. The government alleged that the chiropractor improperly obtained over $3.9 million from Medicare and TRICARE by billing for the implantation of neurostimulator electrodes, a device that is not billable. Even when Medicare contractors and the group’s outside billing companies issued warnings and specific guidance that the devices were being labeled as “possible fraud,” the group allegedly continued billing for the devices. As part of the settlement, the group has agreed to a 10-year period of exclusion from participation in any federal health care programs.
 
The USAO press release is here.

Gravel Supplier Agrees to Pay $1.75 Million to Resolve FCA Allegations 

The U.S. Attorney’s Office for the District of Minnesota announced that Mark Sand & Gravel Co., which supplied gravel materials for several federally-funded road construction projects overseen by the Minnesota Department of Transportation, agreed to pay $1.75 million to settle claims that it violated the federal False Claims Act and the Minnesota False Claims Act. The government alleged that between 2013 and 2015, Mark Sand & Gravel Co. used gravel mix containing unauthorized and substandard materials such as waste or shale rock, in violation of contract specifications requiring use of only approved materials. The supplier then allegedly made materially false claims and statements regarding its use of those materials and its compliance with contract specifications, in order to obtain payment under the contracts. The settlement will be shared between the federal and state governments in accordance with the original funding of the projects.

The USAO press release is here.

Illinois Federal Court Reverses Earlier Decision and Rules that Home Health Company Violated the Anti-Kickback Statute

U.S. District Judge Sharon Johnson Coleman initially decided after a bench trial to dismiss a False Claims Act (FCA) lawsuit brought by a qui tam relator against a home health care company, concluding that the company had not violated the Anti-Kickback Statute (AKS). However, after the Seventh Circuit remanded the decision for reconsideration of plaintiff’s theory of referral, Judge Coleman came to the opposite conclusion and found in favor of plaintiff.
 
Plaintiff alleged that the company violated the AKS and the FCA by paying Healthcare Consortium of Illinois (HCI) $5,000 a month in exchange for referrals. HCI coordinated services for low-income seniors to facilitate their ability to lead independent lives and remain outside of nursing homes. The company argued that the payments to HCI were not kickbacks, but were part of an arrangement to gain access to HCI’s data. Originally, the court rejected plaintiff’s theory that the company used HCI’s data to solicit patients; but on remand and after a second bench trial, the court came out the other way, concluding that the payments to HCI were intended as remuneration for indirect referrals and that the company had failed to satisfy all seven elements of the safe harbor defense.
 
The case is Stop Illinois Health Care Fraud LLC v. Sayeed et al., case number 1:12-cv-09306, in the U.S. District Court for the Northern District of Illinois.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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