Cases in Court

The U.S. Department of Justice (DOJ) decided to approve a $631 million payment from HCA, Inc. as part of the settlement of civil charges against the company, which would bring the total amount paid or agreed to be paid by HCA to around $1.7 billion. According to the AP, reporting on May 7, 2003, a DOJ spokesman said the deal would still need to be approved by a federal judge in Tennessee.

Texas Hospital Chain Pays $1.36 Million

The Civil Division of the DOJ announced on May 7, 2003, that three San Antonio, TX, affiliates of Christus Health of Houston paid $1.36 million to settle claims that they defrauded Medicare and Medicaid during a 3-year period (from 1997 through 2000). This settlement resolves allegations that Primary CareNet of Texas (PCN) (also known as Christus Primary CareNet) and Health Texas Medical Group (HTMG), successor in interest to Solomon Anthony Clinic (SAC), improperly charged Medicare and Medicaid for physicians' evaluation and management (E & M) services. The allegations stem from a qui tam suit filed by Timothy Ohman, PCN's former CFO, who claimed that the management and billing company and two physician practice groups improperly charged evaluation and management services for Medicare and Medicaid patients and thereby received more in reimbursement from Medicare and Medicaid than they were entitled to receive. The whistleblower case is entitled U.S. ex rel. Ohman v. Primary CareNet, et al., No. SA-01-CA-150-IV (W.D. Tex.). The press release is available from www.usdoj.gov/opa/pr/2003/May/03_civ_274.htm

Owner of MN Aviation Company Pleads Guilty to Defrauding Clinic

Stephen C. Durst, the owner and president of Superior Aviation, and the Director of Aviation for St. Mary's Duluth Clinic, pled guilty to defrauding the clinic by billing it for about $500,000 in aviation services that were not performed over a 6-year period. The U.S. Attorney's Office for the District of Minnesota announced the plea on April 30, 2003. According to the government, Durst admitted that he had submitted invoices from a phony aviation services company for various services and items that were not rendered or provided, including aircraft maintenance and parts. The release is posted at www.usdoj.gov/usao/mn/press/econ/durst.htm

More HealthSouth Officials Charged with Violations

On April 24, 2003, the U.S. Attorney's Office for the Northern District of Alabama issued a press release to announce that Aaron Beam, the former chief financial officer (CFO) of HealthSouth Corporation, was charged in a two-count criminal information under a plea agreement in which he agreed to plead guilty, at a later date, to one count of bank fraud for having made false statements to the company's lenders, and a count of criminal forfeiture. Beam had served as HealthSouth's CFO from 1984 until 1997. According to the criminal information, at some point in 1996, a group of HealthSouth's senior officers noted that its financial performance was not meeting the expectations of Wall Street analysts. The group, which including Beam and the then-CEO of HealthSouth allegedly, engaged in a scheme to artificially inflate the company's earnings and to falsify reports of its financial condition. The government's press release noted that Beam is the eleventh individual who has been charged in the ongoing criminal investigation into HealthSouth's collapse. The release is posted at www.usdoj.gov/usao/aln/

District of Columbia Medicaid Provider Pays $13 Million

A settlement has been reached with First Health Services Corp. to resolve allegations that a company First Health had acquired erroneously let the DC Medicaid program be billed, and pay for, medical care for ineligible individuals. According to a release on April 23, 2003 from the U.S. Attorney's Office for the District of Columbia, First Health is the contractor that has been engaged to operate an automated system used to track, process, and adjudicate Medicaid claims for the District of Columbia's Medicaid program. During a 3-year period, from 1993 until the problem was fixed in 1996, a software flaw in the program allowed thousands of payment claims submitted for services provided to ineligible Medicaid beneficiaries to be approved, costing the program millions of dollars. The press release is posted at www.usao-edpa.com/Pr/2003/apr/rothman.html

Civil Settlement Reached with Philadelphia Surgeon

A civil settlement agreement had been reached with Richard R. Rothman, MD, and Reconstructive Orthopaedic Associates II, his billing company, concerning Medicare billing and surgeries performed by Rothman. As part of the settlement, according to an April 21, 2003 release, the U.S. Attorney's Office for the Eastern District of Pennsylvania, announced that Rothman and the company agreed to pay $838,453.

Former Military Dentist Sentenced and Fined

Chui Lun Lui, a former military dentist practicing in Maryland, has been sentenced to a term of 2 years' probation in a federal criminal case, and agreed to pay $100,000 to settle a False Claims Act case arising from the same investigation, according to the U.S. Attorney's Office for the District of Maryland. The investigation, conducted by United Concordia Companies, Inc. and TRICARE Management Activity, resulted in government allegations that Dr. Lui had caused false claims to be submitted for reimbursement to TRICARE over a 2-year period (from 1997 to 1999) for dental work allegedly performed on children of Armed Services personnel. The dental work involved was medically unnecessary periodontal scaling and root planing, a painful and lengthy procedure used to treat gum diseases. According to the government, Dr. Lui submitted claims for this procedure without having x-rays or other documentation to show any medical necessity for the treatment.

DOJ Approves $631 Million Payment

The U.S. Department of Justice (DOJ) decided to approve a $631 million payment from HCA, Inc. as part of the settlement of civil charges against the company, which would bring the total amount paid or agreed to be paid by HCA to around $1.7 billion. According to the AP, reporting on May 7, 2003, a DOJ spokesman said the deal would still need to be approved by a federal judge in Tennessee.

Texas Hospital Chain Pays $1.36 Million

The Civil Division of the DOJ announced on May 7, 2003, that three San Antonio, TX, affiliates of Christus Health of Houston paid $1.36 million to settle claims that they defrauded Medicare and Medicaid during a 3-year period (from 1997 through 2000). This settlement resolves allegations that Primary CareNet of Texas (PCN) (also known as Christus Primary CareNet) and Health Texas Medical Group (HTMG), successor in interest to Solomon Anthony Clinic (SAC), improperly charged Medicare and Medicaid for physicians' evaluation and management (E & M) services. The allegations stem from a qui tam suit filed by Timothy Ohman, PCN's former CFO, who claimed that the management and billing company and two physician practice groups improperly charged evaluation and management services for Medicare and Medicaid patients and thereby received more in reimbursement from Medicare and Medicaid than they were entitled to receive. The whistleblower case is entitled U.S. ex rel. Ohman v. Primary CareNet, et al., No. SA-01-CA-150-IV (W.D. Tex.). The press release is available from www.usdoj.gov/opa/pr/2003/May/03_civ_274.htm

Owner of MN Aviation Company Pleads Guilty to Defrauding Clinic

Stephen C. Durst, the owner and president of Superior Aviation, and the Director of Aviation for St. Mary's Duluth Clinic, pled guilty to defrauding the clinic by billing it for about $500,000 in aviation services that were not performed over a 6-year period. The U.S. Attorney's Office for the District of Minnesota announced the plea on April 30, 2003. According to the government, Durst admitted that he had submitted invoices from a phony aviation services company for various services and items that were not rendered or provided, including aircraft maintenance and parts. The release is posted at www.usdoj.gov/usao/mn/press/econ/durst.htm

More HealthSouth Officials Charged with Violations

On April 24, 2003, the U.S. Attorney's Office for the Northern District of Alabama issued a press release to announce that Aaron Beam, the former chief financial officer (CFO) of HealthSouth Corporation, was charged in a two-count criminal information under a plea agreement in which he agreed to plead guilty, at a later date, to one count of bank fraud for having made false statements to the company's lenders, and a count of criminal forfeiture. Beam had served as HealthSouth's CFO from 1984 until 1997. According to the criminal information, at some point in 1996, a group of HealthSouth's senior officers noted that its financial performance was not meeting the expectations of Wall Street analysts. The group, which including Beam and the then-CEO of HealthSouth allegedly, engaged in a scheme to artificially inflate the company's earnings and to falsify reports of its financial condition. The government's press release noted that Beam is the eleventh individual who has been charged in the ongoing criminal investigation into HealthSouth's collapse. The release is posted at www.usdoj.gov/usao/aln/

District of Columbia Medicaid Provider Pays $13 Million

A settlement has been reached with First Health Services Corp. to resolve allegations that a company First Health had acquired erroneously let the DC Medicaid program be billed, and pay for, medical care for ineligible individuals. According to a release on April 23, 2003 from the U.S. Attorney's Office for the District of Columbia, First Health is the contractor that has been engaged to operate an automated system used to track, process, and adjudicate Medicaid claims for the District of Columbia's Medicaid program. During a 3-year period, from 1993 until the problem was fixed in 1996, a software flaw in the program allowed thousands of payment claims submitted for services provided to ineligible Medicaid beneficiaries to be approved, costing the program millions of dollars. The press release is posted at www.usao-edpa.com/Pr/2003/apr/rothman.html

Civil Settlement Reached with Philadelphia Surgeon

A civil settlement agreement had been reached with Richard R. Rothman, MD, and Reconstructive Orthopaedic Associates II, his billing company, concerning Medicare billing and surgeries performed by Rothman. As part of the settlement, according to an April 21, 2003 release, the U.S. Attorney's Office for the Eastern District of Pennsylvania, announced that Rothman and the company agreed to pay $838,453.