Date Posted: Saturday,
February 15, 2025
LabCorp and University Health System Agree to Pay $388,667 to Resolve Alleged False Claims Act Violations
Laboratory Corporation of America Holdings (LCAH), Laboratory Corporation of America (LCA), LabCorp Tennessee, LLC (LCTN) (collectively, “LabCorp”), and University Health System, Inc. (UHS) have paid $388,667.17 to resolve allegations that they violated the False Claims Act by delaying the submission of physician orders for certain laboratory tests by Caris Life Sciences, Inc. (“Caris”) to enable improper billings to Medicare for those tests.
During the relevant timeframe, Medicare's Date of Service or “14-Day” Rule prohibited laboratories from separately billing Medicare for tests performed on specimens if a physician ordered the test within 14 days of the patient's discharge from a hospital stay either in an outpatient or inpatient setting. If the test was performed more than 14 days after discharge, then Medicare's 14-Day Rule permitted laboratories to bill Medicare directly for the test. If the test was performed within the 14-day window, the laboratory must instead bill the hospital facility.
UHS operates University of Tennessee Medical Center (UTMC), and LCA provides clinical laboratory services through LCTN at UTMC's outpatient laboratory. According to filed documents, between March 2012 and November 2023, UHS and LCTN caused the delay of the submission of physician orders for Caris testing, by either holding orders for submission or canceling and resubmitting orders, until 14 days after a Medicare beneficiary's discharge from the hospital to circumvent Medicare's Date of Service Rule, which allowed the submission of claims to Medicare. The United States contends that, in doing so, UHS and LCTN violated the Date of Service Rule and knowingly caused the submission of false claims for reimbursement to Medicare. UHS and LabCorp cooperated with the United States' investigation and resolution thereof. Caris, for its part, previously agreed to pay $2.8M to resolve allegations in the Eastern District of New York of its related conduct on a nationwide scale.
This settlement resolves, in part, a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permits private parties to sue on behalf of the government for false claims and receive a share of any recovery. The relator received $73,846.76 of the proceeds from the settlement. UHS was not a party to the qui tam case but participated in the settlement.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Source: LabCorp and University Health System Agree to Pay $388,667 to Resolve Alleged False Claims Act Violations (2025, January 2). www.justice.gov
Physicians Toxicology Laboratory and Its Owners to Pay $4.425 Million to Settle Allegations of Unnecessary Drug Testing
Physicians Toxicology Laboratory, LLC (PTL) of Tampa, Florida, has agreed to pay $4,425,000 to resolve allegations that it violated the False Claims Act (FCA) by causing physicians to order medically unnecessary urine drug testing and hormone testing and by submitting claims for reimbursement to the Medicare Program for those tests.
The United States alleges that PTL provided laboratory services for several medical practices in Michigan. These practices ordered urine drug tests (UDTs) for their Medicare patients, and PTL ran these tests and billed Medicare. These practices routinely ordered two types of UDTs: presumptive and definitive. A presumptive UDT is an initial test to detect the presence or absence of a substance or class of substances in the body. A definitive UDT is a more advanced test that can identify individual drugs, distinguish between structural isomers, and report the results of drugs present in concentrations of nanograms per milliliter.
Under its rules, Medicare requires that claims for UDTs be based on an individualized determination for each patient. Medicare does not cover “blanket” orders for UDTs.
Despite these rules, the United States alleges that from January 1, 2017, through December 31, 2019, PTL encouraged these medical practices in Michigan to order UDTs pursuant to blanket orders for all patients without an individualized determination of medical necessity Specifically, PTL created—and encouraged the practices to use—requisition forms that included a simultaneous order for both presumptive and definitive UDTs. PTL also employed and placed in-office urine collectors in the practices, and the collectors typically filled out the blanket orders before submitting them to PTL. As a result, the practices ordered medically unnecessary and non-covered UDTs from PTL, and PTL knowingly submitted these claims to Medicare.
Additionally, the United States alleges that PTL billed Medicare for urine tests for hormone levels ordered by one of the practices with almost every UDT when the laboratory knew that the practice was ordering these tests as a form of specimen validity testing, which is already included in the reimbursed costs of UDTs.
The claims resolved by these settlements are allegations only, and there has been no determination of liability.
Source: Physicians Toxicology Laboratory and Its Owners to Pay $4.425 Million to Settle Allegations of Unnecessary Drug Testing (2025, January 3). www.justice.gov
Telehealth Company Pays $386,000 to Resolve Allegations of Overbilling for Medicare Telehealth Time
CompreCare Health LLC, and its affiliates, doing business as MediTelecare LLC, agreed to pay $358,514.00 to resolve allegations that MediTelecare billed Medicare for telehealth psychotherapy sessions that did not meet the minimum time requirements. CompreCare Health is a Connecticut business and provided services in at least 17 states, including Kentucky.
The United States alleged that, between January 1, 2017, and November 30, 2022, MediTelecare submitted and caused the submission of claims to Medicare for telehealth psychotherapy sessions that did not meet the minimum time requirements for payments and relied on false time records in support of these same telehealth services. The allegations arose from a whistleblower suit filed in federal court in Bowling Green, Kentucky.
Source: Telehealth Company Pays $386,000 to Resolve Allegations of Overbilling for Medicare Telehealth Time (2025, January 3). www.justice.gov
Owner of Addiction Treatment Chain That Billed for Recovery Services Not Provided Sentenced to More Than Eight Years in Federal Prison in Healthcare Fraud Conspiracy
The owner of a now-defunct Rhode Island-based chain of addiction treatment centers has been sentenced to more than eight years in federal prison for defrauding Medicare, Medicaid, and other health insurers out of millions of dollars.
The man previously admitted to a federal judge that he and his company, Recovery Connections Centers of America, Inc. (RCCA), shortchanged patients suffering from substance abuse disorders in Rhode Island and Massachusetts by failing to provide them with required counseling sessions and treatment that were an important part of their care, while simultaneously billing Medicare, Medicaid, and other healthcare payors for those sessions. In many cases, RCCA routinely billed for 45-minute counseling sessions, while providing sessions that were only 5-10 minutes or less in length.
As described in a criminal complaint filed in this matter, under the guise of running recovery clinics that supposedly provided much-needed medical and therapy services to men and women in Rhode Island and Massachusetts who needed help in their struggles with addiction, the defendants shortchanged their patients, providing them with little to no therapy or support, all the while billing Medicare and other insurers as if they had fully served their patients. For example, Brier and RCCA billed the government or insurance providers for 45-minute sessions when, in fact, patients were actually seen for less than 15 minutes - in some cases substantially less than that. One counselor was known as the “five-minute queen” because the counseling sessions would last that long and no longer. In another instance, an employee was equipped with a bell that they would ring to ensure that the flow of patients moved along briskly.
Source: Owner of Addiction Treatment Chain That Billed for Recovery Services Not Provided Sentenced to More Than Eight Years in Federal Prison in Health Care Fraud Conspiracy (2025, January 7). www.justice.gov
Chesapeake Hospital Indicted for Healthcare Fraud Involving Unnecessary Surgical Procedures
As alleged in the indictment, CRMC, formerly known as Chesapeake Regional Hospital, granted privileges to Javaid Perwaiz from 1984 until his arrest in 2019, despite knowing that Perwaiz' privileges had been terminated at another hospital for performing unnecessary surgeries and that he was convicted of two federal felonies in 1996. From 2010 to 2019, CRMC allegedly received approximately $18.5 million in reimbursements from healthcare benefit programs for surgical and obstetric procedures Perwaiz performed at the facility.
Beginning at least as early as January 2010 and continuing until November 2019, CRMC, Perwaiz, and others allegedly conspired to defraud the Centers for Medicare and Medicaid Services, Medicare, Medicaid, the Virginia Department of Medical Assistance Services, and TRICARE. CRMC and Perwaiz allegedly agreed to Perwaiz continually performing surgeries and other procedures at CRMC that were in violation of the rules and regulations of the healthcare benefit programs. CRMC also allegedly defrauded Medicare, Medicaid, TRICARE, Anthem, Optima, Humana, Cigna, Aetna, United, and others to obtain reimbursements for obstetric deliveries that were elective inductions for no medical reason before 39 weeks of gestation, contrary to medical necessity and the standard of care. CRMC allegedly submitted such reimbursements itself and aided and abetted Perwaiz to do the same.
As alleged in the indictment, Perwaiz exclusively performed his obstetric deliveries at CRMC and routinely scheduled them as elective inductions on Saturdays, a day when he was already scheduled to be at CRMC to perform surgeries. To schedule such deliveries, Perwaiz allegedly submitted to CRMC obstetric flowsheets that often had two different delivery dates clearly noted. One due date was accurate and within the standard of care, while the other was fabricated later by Perwaiz to appear that the patient was actually at or after 39 weeks of gestation at the time of induction or cesarean section, when she was not. A review of such forms for Medicaid patients in 2019 allegedly revealed that approximately 64% of forms were altered, resulting in about 39% of his patients of CRMC being induced before 39 weeks of gestation for no medical reason. CRMC employees and practitioners allegedly observed or were made aware of such discrepancies but nonetheless allowed Perwaiz to continue these practices and continued billing for them.
The indictment alleges CRMC knew that Perwaiz routinely and knowingly misclassified inpatient-only surgeries as outpatient procedures but allowed him to continue performing these surgeries. CRMC also allegedly knew that certain healthcare benefit programs would not reimburse a hospital for an inpatient procedure performed on an outpatient basis, that the majority of private healthcare benefit programs reimbursed such procedures at a significantly lower rate, and that inpatient surgeries required an increased level of scrutiny.
CRMC allegedly routinely allowed Perwaiz to deviate from scheduling policies for non-emergent surgical cases. Perwaiz often scheduled his Saturday surgeries on late Friday afternoons. Perwaiz repeatedly performed sterilizations on Medicaid patients at CRMC without valid consent forms, and CRMC allegedly knowingly allowed him to continue to do so.
The indictment alleges that Perwaiz was a solo practitioner who applied to CRMC for privileges in September 1983. While his application was pending, in December 1983, CRMC's President, who remained the President/Chief Executive Officer (CEO) until 2005, was notified by Maryview Hospital in Portsmouth that Perwaiz's privileges at Maryview had been terminated earlier that year for performing unnecessary surgeries. After review of Perwaiz's application, it is alleged that CRMC's Department of Surgery initially declared him unacceptable for appointment but nonetheless granted him privileges in April 1984.
The indictment further alleges that Perwaiz continued to conduct office visits, in-office diagnostic procedures, inpatient and outpatient surgical procedures, and obstetric deliveries at CRMC until his arrest on Nov. 8, 2019. Perwaiz also allegedly performed all his obstetric deliveries and inpatient surgeries, including hysterectomies, and other surgeries and procedures, at CRMC. Many of these procedures allegedly took place on Saturdays when he had a reserved surgical block time at CRMC.
In 1995, Perwaiz was indicted on six counts of felony tax fraud in federal court. He pled guilty to two of the counts and admitted in public filings to extensive fraudulent conduct, including, among other things, falsely claiming a Ferrari luxury sports car as an ultrasound machine so that he could write it off as a business expense.
In November 2020, Perwaiz was convicted of 52 counts of healthcare fraud and false statements in healthcare matters and was sentenced to 59 years in prison. Approximately 38 counts of the convictions were for procedures performed at CRMC, including unnecessary hysterectomies and other invasive and irreversible surgeries, elective inductions prior to 39 weeks of gestation without medical justification, and sterilizations of Medicaid patients without consent forms signed 30 days in advance.
The indictment alleges that CRMC periodically reviewed the credentials of practicing physicians, including Perwaiz, every two years. Perwaiz's re-credentialing packet allegedly contained information regarding his felony conviction, his prior hospital suspension, and notes regarding medical malpractice lawsuits resulting from procedures he performed at CRMC. It is alleged that CRMC continually re-credentialed Perwaiz approximately every two years between 1984 and 2019. Perwaiz was last re-credentialed in June 2019, just five months before his arrest.
Source: Chesapeake Hospital Indicted for Healthcare Fraud Involving Unnecessary Surgical Procedures (2025, January 8). www.justice.gov
The United States and State of North Carolina File False Claims Act Complaint Against Durable Medical Equipment Supplier
The United States and the State of North Carolina have filed a complaint against a DME supplier in North Carolina, alleging that the man knowingly submitted or caused to be submitted false claims to North Carolina Medicaid for more expensive medical supplies than were actually provided to the Medicaid recipients, a practice known as upcoding.
As alleged in the complaint, from at least May 19, 2017, through August 23, 2019, the man, through a durable medical equipment business that he operated under different names, caused the submission of false claims to North Carolina Medicaid for high-reimbursing, specialized nutritional formula for individuals with rare, inherited metabolic disorders when he knew the Medicaid recipients actually received lower-reimbursing Ensure, PediaSure, Boost, and Glucerna drinks.
The claims asserted against the defendant are allegations only and there has been no determination of liability.
Source: The United States and State of North Carolina File False Claims Act Complaint Against Durable Medical Equipment Supplier (2025, January 13). www.justice.gov
AG Nessel Reaches $19.85 Million Multistate Medicaid Fraud Settlement With Behavioral Health Facility
Michigan Attorney General Dana Nessel announced that the State of Michigan, alongside other states and the federal government, has entered into a settlement agreement with Acadia Healthcare Company ("Acadia") concerning allegations that their inpatient behavioral health facilities submitted false claims to government healthcare programs, primarily Medicare and Medicaid. Under the civil settlement agreement, Acadia, a Delaware corporation headquartered in Franklin, Tennessee, will pay $19.85 million, plus interest, to the states of Florida, Georgia, Michigan, and Nevada, and the federal government, more than $6 million of which will go to Medicaid programs. Michigan will receive $412,504.84 in Medicaid restitution and other recoveries.
The settlement resolves allegations involving multiple Acadia facilities in multiple states.
The allegations against each of those facilities include:
- Admitting patients to the facility who were not eligible for inpatient treatment;
- Failing to discharge patients who no longer needed inpatient care;
- Excessive lengths of inpatient stays;
- Inadequate staffing and insufficient staff training and supervision, resulting in assaults, elopements, suicides, and other patient harm; and
- Failing to provide inpatient care per federal and state regulations, such as failing to develop individual treatment plans, failing to provide active treatment, including individual and group therapy, and failing to provide adequate discharge planning.
The investigation and settlement resulted from two whistleblower lawsuits filed in April 2017 in the United States District Courts for the Eastern District of Tennessee and the Middle District of Florida and investigations by Florida, Michigan, and Nevada involving the facilities located in those states.
Source: AG Nessel Reaches $19.85 Million Multistate Medicaid Fraud Settlement With Behavioral Health Facility (2025, January 14) www.michigan.gov
BioReference Health and OPKO Health Agree to Pay $704,349 to Settle Allegations That They Billed the Government for Medically Unnecessary Blood Tests
BioReference Health LLC, formerly known as BioReference Laboratories Inc. ("BioReference") and OPKO Health Inc. ("OPKO"), have agreed to pay $704,349 to resolve alleged violations of the False Claims Act arising from BioReference's submission of claims for laboratory tests that had not been ordered by a patient's provider. OPKO is a Delaware Corporation. BioReference, a subsidiary of OPKO, is headquartered in New Jersey and is one of the largest clinical laboratories in the United States.
The United States alleged that BioReference and OPKO knowingly submitted false claims to federal healthcare programs for complete blood count (CBC) with automated white blood cell (WBC) differential laboratory tests that were not medically necessary. Specifically, the United States alleged that, from Jan. 1, 2012, until March 1, 2023, BioReference and OPKO routinely performed more expensive CBC with WBC differential tests when, in fact, medical providers had ordered less expensive CBC with no WBC differential tests, and then billed federal healthcare programs for the more expensive and medically unnecessary tests.
The settlement stems from allegations originally brought in a lawsuit filed in the District of Delaware by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties, known as relators, to bring suit on behalf of the government and to share in any recovery. In connection with the announced settlement, the relator will receive $112,694 of the recovery.
Source: BioReference Health and OPKO Health Agree to Pay $704,349 to Settle Allegations That They Billed the Government for Medically Unnecessary Blood Tests (2025, January 17) www.justice.gov
Justice Department Files Nationwide Lawsuit Alleging Walgreens Knowingly Filled Millions of Prescriptions That Lacked a Legitimate Medical Purpose
In a civil complaint filed in the U.S. District Court for the Northern District of Illinois, the Justice Department alleges that Walgreens Boots Alliance, Walgreen Co., and various subsidiaries (collectively, "Walgreens") dispensed millions of unlawful prescriptions in violation of the Controlled Substances Act (CSA) and then sought reimbursement for many of these prescriptions from various federal healthcare programs in violation of the False Claims Act (FCA). Walgreens is one of the country's largest pharmacy chains, with over 8,000 pharmacies across the United States.
The government's complaint alleges that from approximately August 2012 through the present, Walgreens knowingly filled millions of prescriptions for controlled substances that lacked a legitimate medical purpose, were not valid, and/or were not issued in the usual course of professional practice. Among the millions of unlawful prescriptions that Walgreens allegedly filled were prescriptions for dangerous and excessive quantities of opioids, prescriptions for early refills of opioids, and prescriptions for the especially dangerous and abused combination of drugs known as the “trinity,” which is made up of an opioid, a benzodiazepine, and a muscle relaxant.
The complaint alleges that Walgreens pharmacists filled these prescriptions despite clear “red flags” that indicated that the prescriptions were highly likely to be unlawful. Walgreens allegedly ignored substantial evidence from multiple sources that its stores were dispensing unlawful prescriptions, including from its own pharmacists and internal data.
The complaint further alleges that Walgreens systematically pressured its pharmacists to fill prescriptions quickly without taking the time needed to confirm each prescription's validity. Walgreens also allegedly deprived its pharmacists of crucial information, including by preventing pharmacists from warning one another about certain prescribers.
The complaint alleges that by knowingly filling unlawful prescriptions for controlled substances, Walgreens violated the CSA and, where Walgreens sought reimbursement from federal healthcare programs, also violated the FCA. The complaint alleges that Walgreens's actions helped to fuel the prescription opioid crisis and that, in some particularly tragic instances, patients died after overdosing on opioids shortly after filling unlawful prescriptions at Walgreens. If Walgreens is found liable, it could face civil penalties of up to $80,850 for each unlawful prescription filled in violation of the CSA and treble damages and applicable penalties for each prescription paid by federal programs in violation of the FCA. The court also may award injunctive relief to prevent Walgreens from committing further CSA violations.
Four different whistleblowers who previously worked for Walgreens in various parts of the country filed whistleblower actions under the qui tam provisions of the FCA. Those provisions authorize private parties to sue on behalf of the United States for false claims and share in any recovery. The Act permits the United States to intervene and take over such lawsuits, as it has done here.
The claims asserted against defendants are allegations only and there has been no determination of liability.
Source: Justice Department Files Nationwide Lawsuit Alleging Walgreens Knowingly Filled Millions of Prescriptions That Lacked a Legitimate Medical Purpose (2025, January 17) www.justice.gov
Source: Sonal Patel
Sonal Patel, BA, CPMA, CPC, CMC, ICDCM, CEO & Principal Strategist SP Collaborative, has over 13 years of experience understanding the art of business medicine. She is a nationally recognized thought-leader, speaker, author, creator, and consultant. As the CEO & Principal Strategist of SP Collaborative, LLC, she serves as a partner to healthcare organizations, medical practices, physicians, healthcare providers, vendors, consultants, medical coders, auditors, and compliance professionals in working together to elevate coding compliance education for the business of medicine.
https://spcollaborative.net/
