The U.S. Department of Justice has announced that a large multispecialty physician group in Florida has agreed to pay $12 million to settle allegations that it submitted false reimbursement claims for radiation oncology treatments to federal healthcare agencies.
Melbourne Internal Medicine Associates (MIMA), the largest physician group providing multispecialty healthcare services on Florida's Space Coast, and Dr. Todd J. Scarbrough, the former director of its cancer center, have agreed to pay $12 million to settle claims relating to violations of the federal False Claims Act. The alleged violations involved MIMA's submission of claims to Medicare and to Tricare, the healthcare program of the U.S. Armed Forces.
The out-of-court settlement resolves a 20-month investigation by the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS), as well as the Department of Justice (DOJ).
Whistleblower complaint
The investigation began after Fred Fangman, MIMA Cancer Center's director of radiation oncology, filed a qui tam whistleblower complaint in the Orlando division of the U.S. District Court for the Middle District of Florida on July 7, 2008.
Fangman's complaint alleged that from the cancer center's opening in August 2003 through 2008, MIMA allegedly sought to increase billings by submitting claims in violation of Medicare guidelines, and allegedly received millions of dollars from Medicare that it was not entitled to receive.
Fangman charged that improper billings included "thousands of claims for image-guided radiation therapy (IGRT) where the therapy was performed without required physician supervision," and routine submission of claims for intensity-modulated radiation therapy (IMRT) that were not medically necessary or properly documented in patients' medical records.
Fangman's complaint also charged that MIMA had developed a policy of submitting add-on claims for "special treatment procedures" and "specialty physics consults" for nearly all of its patients, without substantiated justification in patients' medical records.
The complaint sparked an investigation by the HHS OIG, which led to the filing of a complaint by the Department of Justice in Orlando's U.S. District Court on October 16, 2009.
"The United States' investigation revealed that the MIMA Cancer Center had defrauded the federal health programs by improperly inflating claims through various schemes specifically designed to cloak the fraudulent practices," according to a DOJ press release issued on March 23. "In particular, the MIMA Cancer Center billed for services not supervised, duplicate and unnecessary services, services not rendered, and upcoded services -- a practice in which provider services are billed for higher procedure codes than were actually performed."
In addition, the DOJ statement reported that the federal investigation discovered "that MIMA executives had knowledge of a substantial number of fraudulent billing practices at the facility, but had failed to stop the fraudulent billing."
The DOJ complaint filed in October 2009 also charged that because Osler Medical, a competitive multiphysician practice with offices in Brevard County, had an arrangement with MIMA Cancer Center for some services to be provided, MIMA knowingly caused Osler Medical to unknowingly submit false claims to Medicare and its regional contracted payor, First Coast Service Options of Jacksonville, FL.
MIMA posted a statement on its Web site, stating that it engaged in negotiations with the Department of Justice "for several months to resolve billing and coding issues related to services provided under Medicare and other government payers. This matter has now been resolved. There is a settlement."
The press release further stated that "we still have deep disagreements about allegations made by the government," and that the language of the settlement stated that "Defendants dispute the allegations of the United States and the Relator [Fangman] and deny they engaged in any Covered Conduct. This Agreement is neither an admission of liability by defendants nor a concession by the United States that its claims are not well founded."
The statement concluded, "For our part, MIMA is relieved to have this resolved so we can now move on."
MIMA, with 126 physicians representing 26 specialties, operates 16 healthcare facilities in central and south Brevard County. As of 2006 U.S. Census bureau estimates, approximately 534,000 people live in the area, with more than 130,000, or 25%, estimated to be older than 60.
A 'coordinated effort'
Tony West, assistant attorney general of the DOJ's Civil Division, stated that the settlement with MIMA was the result of a coordinated effort among the DOJ's Civil Division, the U.S. Attorney's Office for the Middle District of Florida, the Office of Investigations for the Department of Health and Human Services' Office of the Inspector General and Office of Counsel to the Inspector General, and the Tricare Management Activity Office of Program Integrity and Office of General Counsel.
The Justice Department reports that it has recovered more than $3 billion from successfully prosecuted convictions and out-of-court settlements since January 2009. Fangman, the whistleblower, will receive $2.64 million, or 22% of the settlement. Under the False Claims Act, whistleblowers are entitled to receive between 15% and 25% of monies recovered by the federal government.
By Cynthia E. Keen
AuntMinnie.com staff writer
March 25, 2010
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