Dermatology providers agree to pay $847,394 to settle allegations of False Claims Act (FCA) violations and Medicare fraud. A July 30 press release from the Department of Justice (DOJ) reported that Forefront Dermatology S.C. and Henghold Surgery Center LLC agreed to resolve allegations that they violated the False Claims Act by knowingly submitting falsified Medicaid claims. The government’s investigation was sparked by a whistleblower lawsuit filed under the qui tam provisions of the FCA by former Forefront employee Christopher Wolfe, M.D. As part of the settlement, Dr. Wolfe will receive a $152,531 whistleblower award.
Both the dermatology practice and the surgery center performed skin cancer removal procedures. The settlement resolves allegations that the two practices engaged in “upcoding,” a practice in which medical providers increase the funds they receive from Medicare by improperly reporting to Medicare that more expensive procedures had been performed than actually were through the use of inaccurate billing codes. Both the dermatology practice and the surgery center allegedly obtained higher reimbursement amounts for skin cancer removal procedures than they were entitled to under Medicare.
“Improperly billing Medicare depletes valuable government resources that provide necessary medical care to millions of Americans,” Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division said in a statement. “We will hold accountable health care providers who enrich themselves by defrauding federal health care programs.” In this case, the U.S. would have had no means to hold Forefront and Henghold accountable without being notified of the Medicare fraud through a whistleblower’s lawsuit, highlighting the essential role whistleblowers play in successful False Claims Act enforcement.
The False Claims Act’s qui tam provisions enable private citizens and private parties like Wolfe to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers, also referred to as “relators,” are eligible to receive between 15 and 30% of the government’s recovery.
During FY 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion, and over $2.4 billion of the recoveries stemmed from qui tam whistleblower lawsuits. Furthermore, according to the government, a record 979 qui tam lawsuits were filed in FY 2024.
A controversial court ruling in Florida last September declared the False Claims Act’s whistleblower provisions unconstitutional. This decision could severely weaken one of the government’s most effective tools for fighting fraud. In response, the U.S. Department of Justice is urging the Eleventh Circuit Court of Appeals to overturn the ruling, pointing out that every other court to consider the issue has upheld the law’s constitutionality.
Concerned about the potential consequences, the National Whistleblower Center launched a grassroots campaign calling on the public to demand that Congress ensure strong protections for the False Claims Act.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.