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Twenty Two Million Dollar Settlement for False Claims Act (FCA) Liability for Medically Unnecessary Services and Therapy
Healogics, Inc. entered into a settlement with the DOJ to pay roughly $22 million to put to rest allegations it violated the False Claims Act (FCA) for overbilling Medicare for medically unneeded and medically unnecessary therapy. Specifically, it was alleged that Healogics, a medical company, that supervises nearly 700 hospital-based wound care centers across the country, improperly billed for its hyperbaric oxygen (“HBO”) therapy. It is not alleged that the therapy wasn’t administered, but instead that it was not needed. Whistleblower lawyer Jason T. Brown commented that, “This was an excellent settlement. One has to ask oneself which is worse though – submitting fraudulent Medicare claims for services not rendered, or actually performing those services on people who don’t need them to justify the alleged Medicare fraud.”
HBO therapy is covered by Medicare as an oxygen enriching treatment to wound care that is supposed to be used in certain well defined circumstances. Oftentimes, a medical company will push its services and products to marshal greater profits and create a buzz about it to generate further use even if its not medically necessary.
According to the settlement, the Defendant agreed to pay $17.5 million up front to settle claims for a four year period. The agreement also calls for an additional $5 million if certain contingencies occur.
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“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.”
Sometimes in resolving whistleblower cases under the False Claims Act, defendants enter into Corporate Integrity Agreements with the Department of Health and Human Services Office of Inspector General. These agreements include monitoring with things like claims and system reviews conducted by independent reviewers often at the entities expense.
In recent years whistleblowers have been handsomely rewarded with a percentage of the recovery and in this whistleblower the case the relator is set to recover up to $4,276,900 as a whistleblower award. In order to bring a False Claims Act case and obtain a reward, however, the whistleblower must use whistleblower counsel.
The case citations are United States ex rel. Van Raalte, et al. v. Healogics, Inc., 14-cv-283 (M.D. Fla.) and United States ex rel. Wilcox. v. Healogics, Inc., et al., 15-cv-1510 (M.D. Fla.).