In The News

Health Care Management Company Agrees to Pay up to $22.51 Million to Settle False Claim Act and Improper Billing Allegations

The US government has once again sent a strong message to companies that it alleges have sought to place profit over patient welfare. This was proven last week when the Justice Department announced that Healogics, Inc. has agreed to pay up to $22.51 million to settle allegations that it violated the False Claims Act and that it billed Medicare for services to patients that were medically unnecessary and unreasonable. Healogics is a Florida-based hospital that owns wound care centers around the nation. The services that the government alleges that Healogics improperly billed for were for hyperbaric oxygen (“HBO”) therapy.

“Medicare beneficiaries are entitled to care based on their clinical needs and not the financial goals of healthcare providers,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “All providers of taxpayer-funded federal healthcare services, whether contractors or direct billers, will be held accountable when their actions knowingly cause false claims for medically unnecessary services to be submitted.”

HBO therapy is a process in which the entire body is exposed to oxygen under increasing pressure as an adjunctive therapy to treating chronic wounds. The settlement announced last week resolves allegations that from 2010 through 2015, Healogics knowingly submitted false claims to Medicare for HBO therapy that was either unnecessary or unreasonable. “Civil healthcare fraud enforcement has always been a core part of the mission of our office,” said United States Attorney Maria Chapa Lopez for the Middle District of Florida. “With this settlement, our Civil Division confirms its commitment to our nation’s critical struggle against practices that put public health programs at risk.”

In addition to the settlement Healogics has agreed to, the company will also have to enter into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. The CIA requires that Healogics submit itself to a claims and systems review process that must be conducted by an Independent Review Organization. “When greed is the primary factor in performing medically unnecessary health care procedures on Medicare beneficiaries, both patient well-being and taxpayer funds are compromised,” said Special Agent in Charge Shimon R. Richmond of HHS OIG. “We will continue to thoroughly investigate health care companies that engage in such fraudulent schemes.”

The allegations that were resolved by this settlement came from a lawsuit that was filed by James Wilcox. Wilcox is a former Director for Research and Quality for Medical Affairs at Healogics. A separate lawsuit was also filed by two doctors and a former program director who worked at Healogics-affiliated wound care centers. The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act. This act permits private individuals to sue on behalf of the government for false claims and to share in any recovery. People who do so usually retain a qui tam Medicare attorney for this purpose. Whistleblower lawyers are knowledgeable in all aspects of the False Claims Act and its provisions. The settlement provides for a whistleblower share of up to $4,276,900.