Investigations Newsletter: Podiatrist Sentenced to Prison for Fraudulent Billing Scheme

Arent Fox

DOJ Litigation News

Podiatrist Sentenced to Prison for Fraudulent Billing Scheme

On July 19, 2019, a New York podiatrist was sentenced to 366 days in prison, assessed a $50,000 fine, ordered to pay $869,651 in restitution and forfeit $177,000 for his role in a years-long, criminal fraudulent billing scheme. The physician pled guilty to allegations that from January 2013 to January 2017 he engaged in multiple fraudulent billing practices resulting in the submission of false claims to the government, including: (i) billing for skin grafts and wound packing services that he did not perform, (ii) billing for work purportedly done by another podiatrist with a higher reimbursement rate that was in fact done by the defendant or not at all, and (iii) billing for more expensive procedures than those actually performed.

The DOJ press release can be found here.

SDNY Files Complaint-in-Intervention Against Spinal Implant Manufacturer and Execs

On July 22, 2019, the United States filed a complaint-in-intervention against spinal implant manufacturer Life Spine Inc. (Life Spine) and two of its senior executives, seeking damages and civil penalties under the False Claims Act (FCA). It is alleged that over the course of several years, the company improperly paid surgeons kickbacks in the form of “millions of dollars of consulting fees, royalties, and intellectual property acquisition fees” to induce the use of Life Spine products, in violation of the Federal Anti-Kickback Statute. The complaint also alleges that the company calculated a return on investment for the kickbacks paid to physicians, evidenced by a regular report “that compared surgeon consulting, royalty, and intellectual property payments to surgeon product usage levels…for each surgeon based on those figures.” If a surgeon’s numbers were too low, company executives allegedly would pressure the surgeon to use more Life Spine products during surgery. The kickback scheme allegedly accounted for approximately half of the company’s domestic sales from 2012 through 2018.

The DOJ press release can be found here.

Suit Filed Against Pain Clinic and its Executives for $25 Million Fraud

Attorneys representing the United States and the State of Tennessee filed a consolidated complaint-in-intervention alleging that Anesthesia Services Associates, PLLC, d/b/a Comprehensive Pain Specialists (CPS) and several of its executives operated a scheme that defrauded Medicare and TennCare (the name of the State of Tennessee’s Medicaid program) of at least $25 million. From 2011 until 2018, CPS allegedly put into place a policy to maximize profits by conducting “medically unnecessary and excessive testing, including a standing order to automatically conduct quantitative drug testing, specimen validity testing, genetic blood testing and psychological testing on virtually all patients, without regard to individual patient risks or need.” CPS also allegedly required providers to send all urine specimens and blood draws to a lab testing facility that CPS owned and operated, which could be reimbursed at a much higher rate. Company executives allegedly were aware that CPS had submitted false claims and received payment from Medicare for non-reimbursable services and failed to reimburse those amounts. One executive allegedly “caused over 2,500 claims to be submitted to Medicare, for which CPS was paid almost $350,000 for procedures and testing on patients during a period of time when Dr. Kroll was out of the country on vacation.” The lawsuit is captioned United States and the State of Tennessee ex. Rel. Suzanne Alt, et al. v. Anesthesia Services Associates, PLLC, et al., Case No. 3:16-cv-00549 (M.D. Tenn.).

The DOJ press release can be found here.

DOJ Settlement News

Pharmacy Owners Pay $400,000 to Resolve FCA Matter

The United States Attorney’s Office for the Eastern District of Pennsylvania announced that the owners of E-Z Pharmacy II agreed to pay $400,000 to resolve allegations that they violated the FCA. The government alleged that the pharmacy billed Medicare for drugs that were not actually dispensed to patients from the period of November 2013 to December 2016.

The DOJ press release can be found here.

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Arent Fox

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