Florida-Based Coastal Dermatology Settles False Claims Act Allegations for $787,000

Following an investigation by the Department of Health and Human Services, along with the Office of Inspector General and the Department of Defense’s investigative unit, a Florida dermatology clinic known as Coastal Dermatology has opted to settle allegations of fraud and illegal billing procedures. The allegations – which are not uncommon in the realm of healthcare fraud – involve a process known as “upcoding,” wherein doctors or other medical professionals bill codes for more costly and valuable services than those services actually rendered. In some cases, managers will enhance an actual service rendered with an upcode, while others will code for services never rendered at all. Upcoding is one of the most common forms of healthcare fraud and is a major contributor to the multi-billion dollar fraud industry.

Details of the case against Coastal Dermatology

Coastal Dermatology, along with its founder, physician Dr. Sanjiva Goyal, agreed to the terms of a $787,814 settlement after investigators uncovered a wide array of violations. Beginning in 2009, Coastal Dermatology was quickly recognized as the top biller in Florida for skin lesion removal procedures, as well as the removal of inflamed seborrheic keratoses. In terms of billing for these procedures to TRICARE, which provides medical coverage to current and former military members, Coastal Dermatology was actually the highest biller for these services in the entire southeastern United States. A full investigation into Coastal Dermatology’s billing practices revealed the reason for the excessive charges.

For a period spanning from 2009 through 2014, Coastal Dermatology is alleged to have routinely billed for elective cosmetic procedures, which are not covered by government healthcare policies (i.e., taxpayers). The provider also upcoded for more costly dermatological procedures than what Medicaid, Medicare, and TRICARE allow. In addition, many of the procedures described above were deemed medically unnecessary considering patients’ clinical needs.

Government comments on settlement

The Department of Health and Human Services commented on this matter, stating:

“Patients unable to receive necessary medical care suffer the cost of Medicare fraud when those funds are purposely stolen and diverted to pay for uncovered voluntary procedures….We will continue to work with our law enforcement partners to protect the integrity of entitlement programs like Medicare.”

The U.S. Attorney’s Office also commented, stating:

“The United States Attorney’s Office is committed to taking the steps necessary to protect Medicare, TRICARE, and other federal healthcare programs from fraud….By bringing FCA cases such as this, we hope to recover funds obtained through the fraud and deter others from attempting similar schemes.”

Lastly, the Department of Defense – which is responsible for the administration of the TRICARE system – reiterated its position against illegal healthcare fraud, stating:

“This settlement highlights the commitment of the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of the Department of Defense health care program….DCIS aggressively investigates health care providers that defraud the DoD, to preserve American taxpayer dollars intended to care for our Warfighters, their family members, and military retirees.”

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