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Friday Enforcement Wrap: Health Care System Settles Stark Law Investigation for $12 Million

Headlines that Matter for Companies and Executives in Regulated Industries

DOJ News

Aurora Health Settles Alleged Stark Law Violations for $12 Million

Aurora Health Care, Inc. settled allegations that it violated the False Claims Act by submitting claims to Medicare and Medicaid in violation of the Stark Law. The government alleged that, between 2008 and 2012, Aurora entered into compensation arrangements with physicians that violated the Stark Law because they were not commercially reasonable, exceeded the fair market value of the physicians’ services, and took into account the physicians’ anticipated referrals, rather than identifiable services. Accordingly, the government alleged that Aurora’s bills to Medicare and Medicaid for those physicians’ services violated the False Claims Act.

The press release is here.

Audiology Practice Admits Illegal Inducements and Services by Unlicensed Professionals in FCA Settlement

Oviatt Hearing and Balance, LLC reached a settlement agreement with the US Attorney’s Office for the Northern District of New York to pay more than $566,000 in connection with an FCA lawsuit alleging fraud on the Medicare and TRICARE programs. Oviatt admitted that two unlicensed individuals performed audiology examinations on Medicare and TRICARE beneficiaries and then billed the federal programs for payment for those services as if they had been performed by a licensed audiologist. Oviatt also admitted to providing beneficiaries with improper inducements for treating at Oviatt, including gift cards, gift checks, iPads, and other similar promotions. The whistleblower who brought the FCA claim will receive $120,000 of the settlement.

The press release is here.

Health System Agrees to Pay $12.5 Million for Fraudulent Billing of Orthopedic Surgeries

Coordinated Health Holding Company, LLC and its CEO agreed to pay $12.5 million to settle allegations that they submitted false claims to federal health care programs by improperly unbundling claims for reimbursement for orthopedic surgeries that should have been billed under a global fee code, which permitted the health system to double bill for the procedures. The government also alleged that consultants advised Coordinated Health on multiple occasions that its coding of the surgeries resulted in improper billing but Coordinated Health failed to change its practices. In addition to the monetary payment, the settlement agreement requires that Coordinated Health enter into a five-year Corporate Integrity Agreement.

The press release is here.

Government Receives $1.6 Million Settlement for FCA Claims Against Durable Medical Equipment Company

Durable medical equipment company Western Medical Group and its principals agreed to pay more than $1.6 million to resolve two whistleblower lawsuits alleging that the company engaged in illegal telephone solicitation to induce sales of knee and back braces to Medicare beneficiaries.

The press release is here.

Litigation Developments

Physical Therapy Manager Pleads Guilty to Health Care Fraud and Embezzlement

A manager of the Trade Winds Health, Swim and Tan Club, which also operated a physical therapy practice, pled guilty to billing approximately $175,000 in fraudulent claims to government health care programs by exaggerating the length of time that physical therapists spent with patients and billing for appointments that did not occur or that he performed without a license. The defendant also pled guilty to embezzling over $26,000 by using a Trade Winds Health, Swim and Tan Club store credit card for personal purchases. The case is United States v. Morrison, No. 2:18-CR-00175 (D. Me.).


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