Department of Justice Seal




(202) 514-2007


TDD (202) 514-1888



WASHINGTON, D.C. -- An Oklahoma-based emergency physician billing company and its physician founder will pay the United States and 28 states $15 million to resolve allegations of false billings to the Medicare, Medicaid, and TRICARE programs, as well as the Federal Employees Health Benefits Program (FEHBP).

Acting Assistant Attorney General David W. Ogden of the Civil Division said the settlement resolves allegations against Medical Consultants, Inc. d/b/a Emergency Physicians Billing Service (EPBS) and its physician founder, J.D. McKean, Jr., M.D. that claimed EPBS typically upcoded claims and billed for services more extensive than those actually provided by physicians. The lawsuit was filed originally in 1994 in U.S. District Court in Oklahoma City.

In addition, Dr. McKean will be excluded by the Department of Health and Human Services from participation in all federal health care programs for 15 years. The United States is receiving $12.9 million as part of the settlement, and the participating states are collecting just over $2 million.

In addition, the Office of the Inspector General of the Department of Health and Human Services and EPBS agreed to a "Corporate Integrity Program" in which EPBS agreed to undertake measures to ensure compliance with applicable laws and Medicare rules and regulations in the future. The program requires, for example, that EPBS contract with an independent professional organization to review EPBS' billing policies, procedures and practices on an annual basis.

According to the complaint filed against EPBS and Dr. McKean, numerous physician groups around the country hired EPBS to submit claims on their behalf to federal and state health care programs. EPBS then submitted false Medicare, Medicaid, TRICARE, and FEHBP claims for patients seen by their physician clients. After a trial during the summer of 1998 in federal court in Oklahoma City, EPBS and McKean were held liable under the False Claims Act based on evidence that EPBS upcoded claims and billed for services more extensive than actually provided.

As part of today's settlement, the estate of Theresa Semtner, who filed the suit on behalf of the United States, will receive approximately $3.2 million. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the recovery.

The case, United States ex rel. Semtner v. Emergency Physicians Billing Services, No. Civ-94-617-(C) (W.D. OK), was handled by the Department of Justice's Civil Division and the U.S. Attorney's Office for the Western District of Oklahoma, with the assistance of HHS' Offices of Inspector General in Washington, D.C., and Dallas; the Oklahoma City office of the FBI; the Tulsa Resident Agency of the Defense Criminal Investigative Service; the Program Integrity Branch of the TRICARE Program, the United States Department of Defense; the Office of Inspector General for the Office of Personnel Management in Washington, D.C.; and various State Attorney General Medicaid Fraud Control Units around the country.

Additional audit support was provided by Xact, the Medicare intermediary in Pennsylvania, and the Mailhandlers Plan of the FEHBP.