News and Press Releases

STAR Physical Therapy billed state and private health plans for bogus private therapy sessions

November 18, 2005

STAR PHYSICAL THERAPY, LLC, a Tacoma health care provider, owned and operated by NANCY WONG, (50) of Tacoma, Washington, was required to pay $655,559 in restitution and damages after pleading guilty to two counts of Health Care Fraud, and entering into a Settlement Agreement under the federal False Claims Act. In addition to the damages and restitution, U.S. District Judge Ronald B. Leighton ordered STAR to pay a $50,000 fine.

STAR pleaded guilty in June 2005 to a scheme to bill government health care programs and private health insurers for private aquatic physical therapy sessions when in fact the sessions were group sessions that should have been billed at a much lower rate. Between 1999 and August 2002 STAR illegally billed government sponsored insurance programs $227,535, and wrongly billed private insurers $200,489. Under the federal False Claims Act, damages owed to the government in health care fraud cases are multiplied, and in this case STAR is paying double the $227,535 damages to government programs for a total payment of $455,070 to the government programs.

WONG, the owner of STAR PHYSICAL THERAPY, LLC, admitted that she instructed employees to fill out the billing code for private aquatic therapy sessions when patients had actually been treated in a group session. In fact, there was not even a code for a group session on the billing form WONG provided to employees. For example, for one therapy session in February 2002, STAR submitted multiple claims for eleven patients indicating they had all had private sessions of 30 to 60 minutes. Thus, that one group session was billed as if there had been nine hours of one-on-one physical therapy.

STAR also submitted bills when patients were simply exercising alone in the pool and were not working directly with a physical therapy staff member. On occasion, STAR submitted claims for a different form of physical therapy instead of the aquatic therapy that was actually provided if a patient's insurance would not cover aquatic therapy.

During the period of the fraudulent billing, NANCY WONG served on the Washington State Board of Physical Therapy. WONG was appointed in January 1998 by Governor Gary Locke. WONG removed herself from the board in 2002, shortly after search warrants were served in this case.

At the sentencing hearing, Judge Ronald B. Leighton stated that conduct such as occurred at STAR "has a very corrosive effect on the confidence that citizens have in our system. Such conduct makes citizens very cynical about services their government pays for."

The case originated with complaints from two whistleblowers who will receive more than $45,000 under the False Claims Act. The Act provides that those who report fraud in government programs receive a portion of the recovery. In this case the whistleblowers will receive 15%.

STAR PHYSICAL THERAPY, LLC, who has changed its name to Second Wind Physical Therapy, LLC, recently sold its assets to a new company, J & J Adventures, owned by a former employee of STAR Physical Therapy, LLC. Second Wind Physical Therapy, LLC, as successor in interest to STAR Physical Therapy, LLC, will be bound by the judgment entered today.

The case was investigated by the Department of Health and Human Services Office of the Inspector General (HHS-OIG) and was prosecuted by Assistant United States Attorney Susan Loitz. The False Claims Act case was prosecuted by Assistant United States Attorney Peter Winn.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney's Office, Western District of Washington at (206) 553-4110.

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