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Home > Medical Professionals > Practice Resources > Practice Articles > Whistleblower Claims

$2.53 million civil settlement of claims of fraudulent Medicare billings

On June 23, 2004, the United States Department of Justice released the details of a $2.53 million civil Settlement Agreement between the federal government and a radiology group that owns and operates seven medical and business offices.

The Settlement Agreement, filed on May 27, 2004, resolved a whistleblower ("qui tam") action that was brought against the radiology group by a former employee who served as Supervisor of Medicare Coders for ten years. The employee resigned from the radiology group, after thirteen and a half years of service, in the fall of 1999.

In the Complaint, the whistleblower claimed that the radiology group had violated the federal False Claims Act by knowingly submitting, or causing the submission of, Medicare claims for which the group was not entitled to payment. Specifically, the whistleblower identified fifty-six (56) distinct areas of alleged over-billing by the group. Allegations in the Complaint included fraudulent Medicare billing activities such as upcoding, incorrect diagnoses codes, the addition of medically unnecessary medical tests and/or procedures, and inflated charges pertaining to CT Scans, DEXA Scans, Evaluation and Management Procedures, Mammograms, MRI and MRA, Nuclear Medicine, Stereotactic Biopsy, Ultrasound Procedures, Miscellaneous Exams, and Multiple Patient Exams.

In the Settlement Agreement, the radiology group made no admission of liability with respect to any of the core allegations made by the whistleblower, including the following activities:

• Billing for retroperitoneal ultrasound procedures not ordered by the patient's treating physicians;
• Billing for non-invasive physiologic studies of extracranial arteries as well as duplex scans, when the physiologic study should have been bundled into the more complex duplex study;
• Billing for non-invasive physiologic studies of the extremity veins as well as duplex scans, when the physiologic study should have been bundled into the more complex duplex scan;
• Billing for restoration procedures not ordered by the treating physician;
• Billing for MRI of the orbit, face and neck that were not ordered by the treating physician;
• Blling for diagnostic mammograms that only qualified as screening mammograms.

Along with the Settlement Agreement, the radiology group entered into a complex corporate integrity agreement ("CIA") with the Office of Inspector General ("OIG") of the United States Department of Health and Human Services ("HHS"). The CIA outlines structural and operational procedures to ensure the radiology group's compliance with the pertinent regulations of all federal health care programs.

Both the Complaint and the Settlement Agreement reflect common operational and billing challenges for radiology practices. This development should serve as a reminder for organizations to reconfirm their procedures for obtaining physician orders and diagnoses, both for original services and for additional images that may be necessary for complete study evaluation. It also demonstrates the importance of capturing full and accurate documentation in all patient files.

written by Julie Muroff
from Sidley Austin Brown & Wood LLP