Two Healthcare Providers Settle FCA Whistleblower Allegations For $8.5 Million


Two home-based healthcare service providers, U.S. Medical Management, LLC (USMM) and VPA, P.C. (VPA) settled whistleblower claims that they submitted unnecessary testing bills to the Medicare program, resulting in the allegedly wrongful payment of millions of dollars over a five-year period. According to an October 8 U.S. Department of Justice (DOJ) press release, USMM and VPA billed for “laboratory and diagnostic testing services” that “were not reasonable and necessary for the diagnosis or treatment of an illness or injury.” These alleged unnecessary claims were prosecuted under the False Claims Act, the U.S.’s premier whistleblower law for detecting medical fraud. USMM and VPA have agreed to pay a total of $8.5 million to settle these whistleblowers’ claims.

The government alleges that between 2010 and 2015, USMM and VPA billed Medicare for testing that did not advance the goal of determining illness or injury in patients, and received massive overpayments in return. The healthcare service providers either did not alert the government to these overpayments or did not have the infrastructure in place to properly detect these overpayments and rectify them.

“USMM and VPA received millions of dollars from the United States for Medicare claims that were not eligible for reimbursement,” said Acting U.S. Attorney Saima Mohsin for the Eastern District of Michigan. “With this lawsuit and the accompanying resolution, USMM and VPA are being held to account for their improper receipt of Medicare claim reimbursements.”

In response to these alleged false claims, at least five individuals filed five separate qui tam lawsuits. The qui tam provisions of the False Claims Act allow private individuals to sue on the behalf of the government, and receive a portion of the total money recovered as a reward for the risk and damages that they assume by doing so. In all qui tam cases like this one, the government is given an opportunity to take over the case, bringing their considerable investigative and prosecutorial resources to bear. The government decided not to do so in all five of these cases, but according to False Claims Act standard procedure, they continued to pursue the cases anyway, and were eventually successful in settling with the company. The government makes the decision to either take over or not take over a False Claims Act case for a number of reasons, but it is almost always more difficult and financially risky for whistleblowers to continue their cases without the government’s aid.

In this case, the first-to-file whistleblower will receive a reward of $1.53 million of the total $8.5 million recovered from the two healthcare companies. Under the False Claims Act, whistleblowers are entitled to a reward of between 15 and 30% of the total, taken off the top of the amount that the government and the parties in question settle the claims for.

Read the DOJ’s press release here.

Read more False Claims Act/qui tam news on WNN.

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