Two Florida surgical companies have agreed to pay $3.4 million to settle whistleblower claims of involvement in a kickback scheme that incentivized medically unnecessary kidney stone treatment procedures. Surgical Care Affiliates, LLC (SCA) and Orlando Center for Outpatient Surgery, LP (OCOS) were accused of violating the anti-kickback statute of the False Claims Act in a lawsuit filed by whistleblower Scott Thompson. The alleged kickback scheme targeted federal medical programs Medicare and TRICARE, as well as the patients who were eligible for these federal medical services.
The doctor allegedly involved in the kickback scheme, the late Dr. Patrick T. Hunter, was involved in a previous and related lawsuit which his estate settled for a total of $1.75 million in January 2021. This more recent settlement centers on the two medical companies who were also allegedly involved in the kickback scheme.
The whistleblower lawsuit alleged that between 2010 and 2016, OCOS submitted false claims and bills to Medicare and TRICARE for procedures known as lithotripsies. A lithotripsy is an advanced treatment for patients with kidney stones that uses shock waves to break up the stones while they are still inside the body, allowing the patient to pass them. The lawsuit alleged that some of the patients who had this procedure done at OCOS didn’t need a lithotripsy, while other patients didn’t have kidney stones at all. Billing federal medical programs for procedures that are not medically necessary is a violation of the False Claims Act, which aims to deter fraudsters from taking advantage of government funding and programs.
The $3.4 million settlement also resolves claims that OCOS had an arrangement with Hunter in which he was paid a bonus for each Medicare or TRICARE-billable lithotripsy procedure he performed at OCOS. The lawsuit alleged that SCA vetted and approved this arrangement. Kickback schemes similar to the one alleged in this lawsuit often cause physicians and medical personnel to act on ulterior financial motives when making life-altering decisions for patients.
The patients who are covered by federal medical programs like Medicare and TRICARE are some of the most financially and medically vulnerable groups in the U.S., and taking advantage of them can be extremely damaging to daily life, as well as to the reputation of federal medical programs.
Speaking on defrauding federal medical programs and the patients covered under them, Defense Health Agency Director, Lt. Gen. Ronald J. Place said: “We owe it to our beneficiaries to ensure their needs are placed first and the commitment to their care is unwavering. Any time the government is defrauded, it is unacceptable to the American taxpayer, and in this case, Medicare also was a victim. We are grateful to the Department of Justice for working to maintain trust and transparency by ensuring medical providers continue to put their patients’ needs first.”
The whistleblower in this case, Scott Thompson, will receive a reward of $748,000 for his part in originally bringing the case, to be taken directly out of the total settlement amount. Under the qui tam provisions of the False Claims Act, the whistleblower can file a lawsuit and receive a reward of 15 to 30% of the total money recovered in the potential final settlement. This system has been proven to effectively incentivize employees to blow the whistle in the medical field when they see corruption or fraudulent activity.
Less than a month ago, the U.S. Department of Justice (DOJ) announced a $11.2 million settlement concerning whistleblower allegations of a nursing facility providing “medically unnecessary rehabilitation therapy services and grossly substandard skilled nursing services.” Both of these cases exemplify how whistleblowers continue to work towards creating a medical system that doesn’t take advantage of its patients or the programs that allow them to receive treatment when they most need it.
Read the DOJ’s press release here.