Two Healthcare Providers Agree to Pay More than $14 Million to Resolve False Claims Act Allegations
In addition to maintaining the integrity of its health care programs, the US government has made it clear that it will continue to pursue companies that improperly siphon money away from its programs. Thus, the Department of Justice announced this week that Health Quest Systems, Inc. and two of its subsidiaries (Health Quest) and Putnam Health Center (PHC), have agreed to pay $14.7 million to resolve allegations that the healthcare providers violated the False Claims Act when they knowingly submitted ineligible claims for reimbursement. Health Quest is a network of hospitals and health care provider that deliver surgical, medical and home health services. PHC is its New York-based subsidiary.
“This resolution is a testament to our deep commitment to protecting the integrity of federally- funded healthcare programs,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “We are determined to hold accountable healthcare providers that knowingly claim taxpayer funds to which they are not entitled.” In the settlement that was reached earlier this week, Health Quest and PHC admitted that from April 1, 2009 through June 23, 2015 they knowingly submitted claims that were billed at two levels higher than supported by their documentation. Additionally, Health Quest admitted that from April 1, 2011 through August 2014, they submitted claims for home health services that lacked the required documentation. This included their failure to document face-to-face physician encounters.
From March 1, 2014 through December 31, 2014, the government alleges that Health Quest subsidiary hospital, PHC submitted false claims from two orthopedic physicians who had a direct financial relationship with PHC in violation of the Physician Self-Referral Law (42 U.S. Code § 1395nn). The government alleged that the physicians were compensated in excess of the fair market value for their services. This violates the Self-Referral Law which prohibits, among other things, hospitals from billing Medicare for certain services referred by physicians with whom the hospital has an improper compensation agreement. Finally, the government alleges that the purpose of the excessive compensation that the physicians received was to induce referrals to PHC. This violates the Anti-Kickback Statute (42 U.S.C. § 1320a-7b) as well.
“Today’s settlement holds Heath Quest responsible for false billings to federally funded health care programs, as well as claims tainted by a hospital’s payments to two physicians for administrative services where it appears that one purpose of those payments was to improperly induce referrals. Hospitals and providers must be vigilant to make sure that claims accurately reflect medical services provided and are supported by sufficient documentation. We will continue to investigate whistleblower complaints vigorously to protect public funds,” said United States Attorney Grant C. Jaquith for the Northern District of New York.
In addition to the settlement reached earlier this week, Health Quest is required to enter into a Corporate Integrity Agreement (CIA) with HHS-OIG and to pay the State of New York $895,427 which jointly funds the State’s Medicaid program with the federal government. The settlement resolves three separate lawsuits that were filed by former Health Quest employees under the qui tam, or whistleblower, provisions of the False Claims Act. The Act permits private individuals to sue for false claims and to share in any potential recovery. Usually, plaintiffs engage the services of a qui tam law firm to handle such matters. A qui tam attorney deals in all areas of the False Claims Act and its provisions. The four plaintiffs in this matter will collectively receive $2,824,904.