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Kentucky Physicians Agree to Pay Nearly $3 Million to Settle False Claims Allegations Related to Fraudulent Medical Claims

One problem of those who allegedly defraud government healthcare programs cause is that they divert resources from those who are in need. Thus, a spokesman for the Justice Department announced earlier this month that several otolaryngologists – Phillip B. Klapper, M.D., Patricia Klapper, and Phillip B. Klapper, P.S.C. (collectively, “Klapper”) – have agreed to pay the government a $2,791,758 settlement to resolve claims that the group improperly billed a federal healthcare program for audiological services and hearing aids. “Pursuing healthcare fraud is a priority of this Office and of the Department of Justice. We will continue to work with the Department of Labor and with other governmental agencies to ensure that fraudulent claims are investigated and those responsible are required to pay,” stated United States Attorney Russell M. Coleman. “Medical providers who overbill federal healthcare programs defraud the taxpayers and drive up the cost of healthcare for us all. Recovering taxpayer dollars lost to fraud helps keep strong those critical public healthcare programs so many people depend on,” said Coleman.

The United States alleged that the doctors, known as “Klapper”,  knowingly submitted false claims which sought reimbursement for audiological procedures that were either not performed by certified personnel or that they altered in order to make the test results appear as if some claimants had hearing loss when indeed they did not. Moreover, the government contends that the doctors sought to exploit the Federal Employees’ Compensation Act. This act is the worker’s compensation program for federal employees. It is administered by the Department of Labor’s Office of Workers’ Compensation Programs.

Under the terms of the settlement agreement, Klapper has paid $2.79 million to settle the claims arising from such alleged conduct. Additionally, Klapper has agreed to be permanently banned from future participation in the Federal Employees’ Compensation Act program. The settlement came about as the result of a qui tam suit that was filed by Kimberly Cummings, a former employee of Klappers. Her lawsuit utilized the qui tam provisions of the False Claims Act. This law allows private individuals to sue for false claims on behalf of the federal government with or without a qui tam lawyer and to receive a share of any recovery. (Qui tam law firms, also known as “whistleblower” law firms, represent people who report alleged false claim violations.)

The matter was handled by Assistant United States Attorney L. Jay Gilbert, of the U.S. Attorney’s Office for the Western District of Kentucky, and the U.S. Department of Labor.