Investigations Newsletter: Physician Partners of America Agrees To Pay $24.5 Million To Resolve False Claims Act Allegations | ArentFox Schiff


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Physician Partners of America Agrees To Pay $24.5 Million To Resolve False Claims Act Allegations

Physician Partners of America LLC (PPOA), its founder, and its former chief medical officer agreed to pay $24.5 million to resolve FCA allegations raised in four qui tam lawsuits filed by current and former employees of PPOA and its affiliated entities.

PPOA allegedly billed federal healthcare programs for unnecessary medical testing and services and paid unlawful remuneration to its physicians. Specifically, the government alleged that PPOA required its physicians to order multiple urine drug tests without determining whether such testing was reasonable and necessary and before reviewing the results of initial testing to determine if additional testing was necessary. Federal healthcare programs were then allegedly billed for the highest-level urine drug testing by a toxicology lab affiliated with PPOA. According to DOJ’s press release, PPOA physicians were incentivized to order presumptive urine drug tests because they received 40% of PPOA’s profits from such testing in violation of the Stark Law. PPOA is also alleged to have required patients to receive genetic and psychological testing without any determination as to the reasonableness or necessity of such testing.

The government further alleged that PPOA falsely represented to the Small Business Administration that it was not engaged in any unlawful activity when it sought to obtain a $5.9 million Paycheck Protection Program loan. According to the government, this representation was false because at the time of the loan application, PPOA required its physicians to schedule an allegedly unnecessary evaluation and management appointments with patients every 14 days instead of monthly and to bill the evaluation and management appointments using high-level procedure codes in order to compensate for lost revenue resulting from Florida’s suspension of all non-emergency medical procedures in March 2020.

In addition to paying $24.5 million, PPOA agreed to enter into a 5-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which requires PPOA to, among other things, maintain a compliance department, medical director and oversight board, retain a compliance expert, provide management certifications, maintain written standards, conduct training and education, obtain multiple annual claims reviews by an Independent Review Organization, establish a risk assessment and internal review process, and implement monitoring of testing referrals.

Read DOJ’s press release here and a copy of the settlement agreement here.

Skagit Family Health Clinic Agrees To Settle Fraud Allegations

Skagit Family Health Clinic of Mount Vernon, Washington, agreed to pay $120,000 to state and federal governments to resolve allegations that it filed false claims with state and federal medical programs between 2015 and 2020. According to DOJ’s press release, the clinic unlawfully imported birth control medications that were not approved by the Food and Drug Administration from a foreign source and then submitted claims for these birth control medications to state and federal medical programs.

Read DOJ’s press release here.

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