District Court Holds Medical Billing Company Liable for Fraudulent Compensation Claims

Many of our recent posts relating to fraudulent billing practices have involved claims against healthcare institutions accused of perpetuating fraud in Medicare and Medicaid billing. However, a recent case out of Northern California highlights a growing trend in workers’ compensation fraud – or, the submission of invoices and bills to the Department of Labor on behalf of employees who either were not actually injured, did not receive the indicated treatment or received medical care that was not necessary. The Department of Justice recently pursued claims against six defendants, for $3 million in damages. In the most recent and final settlement, a medical billing company, its principal officer and an employee, were required to pay $1.7 million – a portion of which is to be reserved for the qui tam plaintiff.

DOJ’s Investigation Reveals Widespread, Multi-Jurisdictional Fraud

The case of U.S., et. al. v. A.B.C. Billing, et. al. involves Advanced Physical Medicine & Rehab Group Inc. (located in Oakland, Calif. and Rhonert Park, Calif.), Advanced Occupational Rehabilitation, Inc. (located in Oklahoma), Advanced Medicine and Rehabilitation of Texas, Inc. (located in Texas), Advanced Medicine and Rehabilitation of Texas, P.A. (located in Texas), and the two physicians located in Oakland who own these clinics. Early in 2005, a former physician employed by the Texas clinic began to realize its claims under state and federal workers’ compensation laws were amiss and commenced a whistleblower lawsuit. From 2005-2010, multiple documents revealed billing, ultimately charged to taxpayers, for services never rendered, including:

•  Therapeutic “exercises”;
•  Therapeutic “activities”;
•  Physical performance tests for neurological function;
•  Unspecified materials and supplies;
•  Time spent by office staff for filling out paperwork;
•  Comprehensive examinations with high-complexity medical decision-making;
•  Prolonged physician services (i.e., office visit with a physician exceeding one hour).

As the defendants’ misconduct continued, the DOJ uncovered additional fraudulent practices relating to medical billing for pain management procedures which were either not medically necessary or never rendered.

DOJ Releases Terms of Settlement Agreement

The DOJ recently released a copy of the settlement agreement entered into between the billing company through its principal and the United States government. In the agreement, the company must pay $1.7 million to the U.S. within 30 days or it will be immediately excluded from the Department of Labor’s federal healthcare program. In addition, the relator is set to receive 19 percent of the award as well as $40,000 in attorneys’ fees.

Blowing the Whistle on Fraudulent Billing Decreases Costs for All

The above-listed procedures and devices are generally characterized as big-ticket items, subject to sizable reimbursement through federal healthcare programs and office  like the Deprartment of Labor’s Office of Workers’ Compensation. When these systems are taken advantage of, resources are reduced for those who are truly in need of care.

Contact Us to Learn More

Do you need a Whistleblower Lawyer or want to know more information about Qui Tam Law and your rights under the False Claims Act?

There are three easy ways to contact our firm for a free, confidential evaluation with one of our whistleblower attorneys:

1. Fill out the contact form on this page.
2. Email [email protected]
3. Call (888) 647-9292

Your submission will be reviewed by a Berger Montague qui tam attorney and remain confidential.