Federal prosecutors unsealed a lawsuit today alleging Diagnostic Physicians Group, a subsidiary of Infirmary Health System, Inc., unlawfully billed government healthcare programs more than $521 million over a period of six years, leading to nearly $20 million in overpayments to the group.
According to the complaint, the defendants “knowingly submitted false and fraudulent claims and payment request certifications” by constructing false records, documents and statements, generating more than $18.6 million in claims paid out to Diagnostic Physicians Group (DPG) over the same time.
The suit was originally filed in 2011 by a whistleblower, former DPG Cardiologist Dr. Christian Heesch, but has been kept under seal while the government investigated the allegations and eventually decided to take the lead in prosecuting the case. Heesch, who joined DPG in 2003 and conducted an ongoing inquiry into its billing practices, was fired in July 2011, about six weeks after launching a formal request for records.
He is suing DPG for “wrongful discharge.” Also under federal whistleblower laws, he stands to possibly be paid from 15 to 25 percent of whatever money would be recovered by the government during a successful prosecution of the case.
According to the complaint, DPG physicians are also stakeholders and therefore prohibited by the Anti-Kickback Statute from self-referrals. It also alleges violations of the Stark Law, which forbids a hospital or clinic from billing Medicare for certain services referred by physicians who have a financial relationship with the entity. The lawsuit also names IMC-Diagnostic and Medical P.C., Infirmary Medical Clinics, P.C. and Infirmary Health Systems, Inc. as defendants.
“Defendant DPG through its employed physicians, officers, directors and shareholders conspired to and did knowingly refer patients to defendants D&M Clinic, Infirmary Clinics, and Infirmary Health notwithstanding the existence of prohibited financial relationships among the defendants in violation of the Stark Law, and defendants unlawfully submitted claims to Medicare, Alabama Medicaid, and other Federal HealthCare Programs for goods and services supplied to patients as a result of such violative referrals,” the lawsuit reads.
It further states that a “large number” of patients were subjected to unnecessary nuclear imaging diagnostic tests, increasing their risk of cancer. When Heesch successfully lobbied DPG’s cardiology department to adopt more stringent protocols to approve the procedure, DPG President Dr. F. Martin Lester “watered down” the new criteria in order to “continue to generate compensation.”
In regards to the Anti-Kickback Statute, “DPG physicians’ compensation methodology involved as component remuneration in the form of Stark Compensation payments based on patient referrals from DPG to defendants D&M Clinic, Infirmary Clinics, and Infirmary Health. To induce patient referrals, Defendants D&M Clinic, Infirmary Clinics, and Infirmary Health knowingly and willfully paid DPG remuneration prohibited under the Anti-Kickback in the form of the compensation arrangement between the defendants. In return for patient referrals, DPG knowingly and willfully received from defendants D&M Clinic, Infirmary Clinics, and Infirmary Health, remuneration prohibited under the Anti-Kickback.”
The two practices “caused the submission of more than $521,600,559.00 worth of charges which defendants unlawfully billed to Medicare, Medicaid, TRICARE and other Government Healthcare payors for designated Health services from January, 2004 up and through December, 2010 alone, which generated $18,603,664.00 in false claims paid out to defendant DPG and illegal collections in the amount of $18,603,664.00 in violation of the Stark Law. As a direct and proximate result of this conduct, the United States and American taxpayers have suffered more than $18,603,664.00 in actual damages from January 2004 up and through December 2010 alone,” it reads.
The lawsuit was originally filed under the False Claim Act, which allows people aware of government fraud to file suit on behalf of the government. The government has the option to join the suit or the plaintiff can continue independently.
Christ Coumanis, an attorney representing Heesch, declined to speak about the specifics of the suit but said the “complaint speaks for itself.”
“We’re real pleased the government intervened in the complaint and we stand ready to help in any way possible,” he said.
The government’s intervention in the lawsuit was spurred by the Health Care Fraud Prevention and Enforcement Action Team (HEAT), which was established by Attorney General Eric Holder in 2009. Recoveries in False Claims Act cases since 2009 are more than $14 billion, according to the U.S. Department of Justice.
Defendants found guilty under the False Claims Act may be liable for three times the government’s losses, plus as much as $11,000 per claim. Heesch is seeking double back pay plus interest, the amount of his pension and other benefits; plus any other damages “as a result of defendant DPG’s retaliation and wrongful discharge,” according to the lawsuit.
A request for comment from DPG or Infirmary Health was not immediately returned.