Lymphedema & Wound Care Institute Settle False Claims Act Allegations

HOUSTON - Susan Morgan, Erin Hamilton and Ryan Chuston, doing business as the Lymphedema & Wound Care Institute Inc., have paid the United States $4.3 million to settle claims they violated the Federal False Claims Act by submitting claims to the Medicare Program for physical therapy treatments provided by unqualified therapists, announced United States Attorney Kenneth Magidson. Additionally, under the terms of the settlement agreement, Morgan will be barred from participating in federal health benefit programs for a period of 10 years.

Morgan, Hamilton and Chuston conducted business in four locations throughout the Houston area as the Lymphedema & Wound Care Institute. The settlement announced today involved allegations that from Jan. 2, 2006 through Sept. 12, 2012, they billed the Medicare program for providing manual lymphatic drainage therapy to Medicare beneficiaries using massage therapists as opposed to physical therapists as required under the rules and regulations governing the Medicare program.

“Today’s settlement once again demonstrates our commitment to fight the fraud and abuse that threatens the financial health of our federal healthcare programs,” said Magidson. “In addition to yielding a substantial recovery for taxpayers, this settlement will prohibit Morgan from participating in the federal health benefit programs for several years, which should deter similar conduct in the future.”

By agreeing to a voluntary suspension from federal health benefit programs, Morgan will not be allowed to bill these programs for treating Medicare beneficiaries for 10 years.

Also as part of the agreement, Hamilton and Chuston have agreed to operate the Lymphedema & Wound Care Institute under a corporate integrity agreement to be monitored by the Office of Counsel to the Inspector General for the Department of Health and Human Services. The corporate integrity agreement will provide for increased monitoring of Lymphedema & Wound Care Institute’s billing practices.

The settlement resolves allegations made against Morgan, Hamilton and Chuston in a qui tam or whistleblower lawsuit filed in January 2011 in federal court by a physician who also provides manual lymphatic drainage treatments to patients with lymphedema. Under the False Claims Act, private citizens can bring suit on behalf of the government and share in any amounts that are obtained through that legal action. In this case, the whistleblower will receive 19% of the proceeds of the settlement.

The investigation was conducted by the Department of Health and Human Services - Office of Inspector General. Assistant United States Attorney Andrew A. Bobb is prosecuting the case.