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Oncology providers to pay $26 million in False Claims Act case

Florida-based 21st Century Oncology provides integrated cancer care. It owns and operates affiliates and subsidiary clinics throughout the U.S., with doctors specializing in fields such as medical oncology, radiation oncology and urology. It has just settled two cases with the Justice Department for $26 million.

The company self-disclosed what a U.S. Attorney called "a major fraud" against Medicare's Electronic Health Records Incentive Program. In addition, a whistleblower brought allegations that the company violated the Stark Law, which prohibits certain types of physician self-referrals. These Stark Law violations involved false Medicare claims, which can be alleged under the False Claims Act. That whistleblower will receive $2,000,000 million as a reward.

Violations disclosed by the company

According to the Justice Department, 21st Century Oncology committed fraud against Medicare's EHR Incentive Program. When doctors attest to meaningful use of qualifying EHR technology, the program grants incentive payments and refrains from making downward adjustments to specific Medicare claims.

The company knowingly submitted physicians' false attestations that they had used the electronic health records. Moreover, employees engaged in a cover-up. They apparently faked data and utilization reports to make it look like the physicians had indeed used the electronic health records, and added EHS vendor logos to the reports to make them look official.

Whistleblower's Stark Law allegations

Except in specific situations, the Stark Law prohibits the submission of Medicare claims for services performed as referrals from doctors with whom the service provider has a financial relationship. In other words, Medicare providers can't lie about their financial relationships in order to charge Medicare at a higher rate or to gain another financial advantage.

For example, doctors can't make Medicare referrals to organizations they or their family members have a financial interest in. Also, physicians can't certify the need for referrals when they aren't medically necessary.

At 21st Century Oncology, a former interim vice president for financial planning noticed that prohibited self-referrals were taking place. He filed a False Claims Act lawsuit. When such lawsuits are successful, the whistleblower receives a share in whatever financial recovery is made on behalf of the government.

The Justice Department found that certain compensation the doctors had received from Medicare was unlawful under the Stark Law. When Stark Law violations cost the government money, they also violate the False Claims Act.

21st Century Oncology agreed to pay the government $26 million to resolve the allegations. It also agreed to a five-year corporate integrity agreement requiring it to undertake compliance reforms and independent annual reviews.

If you work in healthcare and have noticed suspicious financial arrangements or possible self-referrals, we recommend contacting a lawyer experienced with the Stark Law and the False Claims Act.

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