Doctor Settles Allegations of Performing Unnecessary Nasal Surgery on Pediatric Medicaid Patients

An Oklahoma-based doctor and hospital have agreed to pay $1.5 million to settle allegations of performing medically unnecessary nasal surgeries on pediatric Medicaid patients.
Image source: Wikimedia Commons

In yet another healthcare fraud case, an Oklahoma-based hospital, its parent company Health Management Associates, and Dr. Daniel Castro have agreed to settle a whistleblower lawsuit filed under the federal False Claims Act and its Oklahoma counterpart. According to the allegations found in the complaint, the medical professionals involved were routinely billing the federal government and state Medicaid agency for services never rendered, or rendered more cheaply than was reflected in the invoices. Due to her diligence and perseverance in the case, the whistleblower is set to receive nearly $160,000 as a reward for coming forward. The federal government received $1,065,000, while the state of Oklahoma received $435,000 from the defendants.

Applicable Laws

In today’s case, the False Claims Act was used to recover a large majority of the settlement amount. The federal FCA imposes possible triple damages against defendants found to be engaging in healthcare fraud. Private individuals with original information showing fraud may come forward under the FCA’s qui tam provisions by filing a civil lawsuit in federal district court with the help of a whistleblower attorney. If the case is successful, the plaintiff could receive up to 30 percent of the reward.

Most states maintain a state-law False Claims Act to address fraud against state agencies and taxpayers. With respect to healthcare fraud, the Medicaid system represents a complex coordination between federal and state resources and is therefore subject to applicable state false claims acts, as well. In Oklahoma, the Medicaid False Claims Act works to assign liability to any person who knowingly submits a false or fraudulent claim for reimbursement on behalf of or by any Oklahoma Medicaid beneficiary. Under the law, defendants could face a penalty of between $5,000 and $10,000 per violation, which may then be tripled.

Details of United States ex rel. Sandra Simmons v. Health Management Associates, et al.

In the case against The Medical Center of Southeastern Oklahoma and its parent company Health Management Associates, Inc., the hospital is alleged to have billed Oklahoma Medicaid, known as SoonerCare, for medically unnecessary and false medical procedures. The allegations specifically name otolaryngologist Dr. Daniel Castro, who practiced with the group from 2005 to 2010, as responsible for much of the fraudulent billing practice.

More specifically, the case involves allegations of medically unnecessary functional endoscopic sinus surgeries performed by Dr. Castro on pediatric SoonerCare beneficiaries. This procedure involves the insertion of a balloon into the sinus cavity and is generally recommended to treat patients suffering from chronic sinus infections, polyps, or nasal obstruction. The DOJ and Oklahoma investigators assert that Dr. Castro was performing this procedure on children who did not present these conditions and thereafter billed the Medicaid system for this invasive, unnecessary, and risky surgery.

Combatting Healthcare Fraud

The egregious allegations in this case involve specifically targeting underprivileged pediatric Medicaid patients for purposes of increasing profits at the expense of state and federal tax dollars. If this practice invokes feelings of anger, you are not alone, as hundreds of whistleblowers come forward each year with similar claims of healthcare fraud and abuse of the system. If you are aware of a similar practice at your place of employment or by your healthcare provider, contact Berger Montague right away.

By | 2018-03-27T08:57:33+00:00 May 7th, 2014|Healthcare Fraud|