Department of Justice Announces Severe Penalties Against Lymphedema & Wound Care Institute

Federal law prohibits private companies from engaging in fraudulent misconduct and misspending of federal funds. This includes all contractors doing business with the federal government or any entity receiving federal funds through a reimbursement program. One of the top sources of federal fraud arises in the healthcare industry and is punishable under the False Claims Act (“FCA”). Under the FCA, individuals with original information of fraud can report what they know to a whistleblower attorney, who in turn files a complaint on behalf of the whistleblower. From there, the United States government, through the Department of Justice (“DOJ”), has the option of joining the case and spearheading the investigation itself. If an amount is recovered, the plaintiff whistleblower stands to receive up to 30 percent of the judgment or settlement.

In today’s case, we review a recent settlement between the DOJ and a healthcare provider known as the Lymphedema & Wound Care Institute, Inc. The entity was alleged to be engaging in practices in violation of Medicare and Medicaid rules.  They paid a settlement and will face further penalties moving forward which will help patients receive the care the need.

Details of Case Involving Lymphedema and Wound Care Institute

Texas-based Lymphedema & Wound Care Institute, Inc.  (“LWCI”) is in the business of treating the condition known as lymphedema, defined as “an accumulation of lymphatic fluid in the interstitial tissue that causes swelling, most often in the arm(s) and/or leg(s), and occasionally other parts of the body. Lymphedema develops when lymphatic vessels are missing or impaired (primary), or when lymph vessels are damaged or lymph nodes are removed (secondary).” The group has been in business since the mid 1980’s and is located in the Sugar Land area of Texas.

The whistleblower is a former physician who provided manual lymphatic drainage treatments to patients with this condition. He filed his qui tam action in federal court in January, 2011. Following the filing, the Department of Health and Human Services through its Office of Inspector General opted to get involved and spearheaded an investigation leading to the recent settlement agreement.

According to the underlying allegations, LWCI’s practices and procedures were examined for a period spanning from 2006 through 2012. Investigators uncovered several violations of the FCA, including the use of unqualified massage therapists as opposed to physical therapists to provide manual lymphatic drainage therapy to Medicare patients. Under Medicare guidelines, only a licensed physical therapist can provide such services.

Penalties

LWCI agreed to pay U.S. taxpayers $4.3 million to settle its FCA claims. Further, certain physicians within the practice will be barred from offering healthcare services to be reimbursed under any federal health benefit program for a period of ten years. LWCI has also agreed to operate under a compliance agreement.

In a statement by prosecuting attorney Kenneth Magidson, “[t]oday’s settlement once again demonstrates our commitment to fight the fraud and abuse that threatens the financial health of our federal healthcare programs….in addition to yielding a substantial recovery for taxpayers, this settlement will prohibit [the physician] from participating in the federal health benefit programs for several years, which should deter similar conduct in the future.”

Whistleblowers Help Protect Patients From Unlicensed Providers

It is hard to imagine the shock that accompanies the realization that you have been receiving medical care from an unlicensed practitioner, all for purposes of increasing profit margins through defrauding Medicare. Yet, patients of LWCI have endured exactly that scenario. Due to the courage of the whistleblower, patients of LWCI can once again depend upon their practitioner to be a licensed, well-trained medical professional. If you are aware of a similar practice in your healthcare facility, either as a patient or employee, we encourage you to contact us right away.