After mediation with the United States Attorney’s office and a ‘whistleblower,’ Baldwin Bone and Joint is expected to agree to a $1.2 million settlement for improper billing practices involving reimbursements some of its physicians received from Medicare and TRICARE.
On Tuesday, a federal judge unsealed a lawsuit originally filed by a former BB&J employee in 2015. In the complaint, John Seddon made a number of allegations about how the orthopedic clinic was billing federal programs like Medicaid, Medicare and TRICARE, which provides healthcare to active and retired members of the U.S. military.
These types of “qui tam” proceedings are brought on behalf of individual plaintiffs as well as the U.S. government and are often called “whistleblower” cases. If the government chooses, it can then intervene and become involved as well, but prosecutors don’t always opt to do so.
Seddon made a number of claims in his initial complaint, but federal prosecutors only found cause to intervene on three of those allegations. Two of those had to do with who was actually performing physical therapy services that doctors collected federal reimbursements for.
Essentially, Medicare and TRICARE will reimburse physicians for some physical therapy services, but only if those services are rendered by a physician, a qualified employee of a physician, a physician-directed clinic or by a qualified physical therapist in independent practice.
Physical therapy has to be conducted by a licensed physical therapist in order to be reimbursable under TRICARE, per the program’s regulations. Yet, according to the federal government, doctors at BB&J submitted thousands of claims that didn’t meet those standards.
“From November 5, 2009 through September 4, 2015, Baldwin Bone & Joint, P.C. and the individual physicians named in [Seddon’s] complaint billed Medicare and TRICARE for physical therapy services performed by athletic trainers and an exercise physiologist, who are not authorized providers,” Assistant U. S. Attorney Daryl Atchinson wrote in a notice to intervene filed earlier this week. “During this same time period, BB&J also billed TRICARE for physical therapy services performed by physical therapy assistants, who are not authorized providers.”
Atchinson also noted that doctors working for BB&J were receiving extra compensation based on the number of patients they referred for other services BB&J could provide. He said that was a violation of the Physician Self-Referral law, which is commonly referred to as the “Stark Law.”
There are some exceptions to that law, though. For instance, doctors who work at a clinic that offers physical therapy or MRI services can refer patients to those services. However, they can’t be compensated based on the number of referrals they make because it can create a financial incentive to make more referrals — often at the expense of healthcare providers.
According to the government, “BB&J had direct compensation arrangements with its shareholder physicians that did not satisfy the requirements of any applicable exception to the Stark Law because the compensation BB&J paid to its shareholder physicians was directly or indirectly related to the volume of each shareholder physician’s referrals.”
BB&J was notified about the government’s concerns in late 2018 and worked to come to a settlement with prosecutors and Seddon. While the details are being finalized, Seddon’s attorney, Jim Johnson, told Lagniappe it’s expected to be around $1.2 million.
Of that, $200,000 would go to Seddon, $100,000 would help reimburse legal expenses associated with the case and $900,000 would be recovered by Medicare and TRICARE. On Tuesday, he praised Atchinson the local U.S. Attorney’s office for their handling of the case.
“These regulations are very complex and once we provided the allegations of fraud, [Atchinson] never backed down or let BB&J out of his sight,” Johnson wrote via email. “He had to comb through thousands of claims and thousands of pages of material to make the case.”
Other cases involving similar violations have resulted in federal criminal charges, but those are typically only brought when practices were egregious or endangered patient safety. There has been no suggestion of those types of concerns at BB&J — something the company noted in a statement released after the case was unsealed this week.
That statement can be read in its entirety below:
Today the U.S. Government unsealed documents related to a civil complaint involving Baldwin Bone & Joint, P.C. All parties involved in the complaint have agreed to a settlement and that settlement is pending. As part of the settlement process, Baldwin Bone and Joint, PC will formally file its response to the unsealed complaint in the upcoming days. As in many other civil cases, the claims have been resolved by a settlement and this will bring closure to the claims made. None of the alleged violations are related to patient care. The allegations involve technical regulatory discrepancies during the 2014 – 2016 time period.
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