News and Press Releases

United States Attorney Jenny A. Durkan
Western District of Washington

Lakewood Firm Over Billed Medicare and Medicaid

January 7, 2011

United States Attorney Jenny A. Durkan announced today that MSO Washington, Inc. (“MSO”), a medical practice management company and billing service located in Lakewood, Washington, and Charles Plunkett, MSO’s owner, agreed to pay the United States $565,000 to settle allegations of health care fraud raised in a 2006 qui tam or “whistle-blower” lawsuit filed in federal court in Tacoma by a former MSO employee.

MSO operated an entity called “The Home Doctor,” which managed physicians and other non-physician professionals, all of whom billed their services through MSO, to visit Medicare and Medicaid beneficiaries residing in various residential care facilities (group homes, adult family homes, assisted living facilities, custodial care facilities, skilled nursing homes, community mental health facilities) throughout King and Pierce Counties.

According to the parties’ settlement agreement, between January 1, 2002 and continuing through the present, MSO allegedly submitted claims to Medicare and Medicaid (on behalf of MSO-contracted health care providers) for reimbursement for: (1) medically unnecessary services; (2) services lacking proper documentation; (3) services billed at a higher level than were actually rendered (so-called “upcoding”); and (4) services that were never actually rendered. The MSO-contracted health care providers were generally unaware of the nature of the services billed by MSO on their behalf to federal health care programs. Neither MSO nor Plunkett admits to any liability as part of the resolution of this matter.

In addition to the parties’ settlement agreement, MSO and Plunkett will enter into a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services (“HHS-OIG”), pursuant to which MSO’s continuing operations will be subject to HHS-OIG scrutiny and annual audits by an independent audit firm. MSO has separately settled with the Office for Civil Rights of the Department of Health and Human Services allegations that it violated the Health Information Portability and Accountability Act (“HIPAA”) by disclosing patients’ protected health information to an insurance company under common ownership with MSO.

Pursuant to the provisions of the False Claims Act, 31 U.S.C. § 3730, private parties may file lawsuits in the name of the United States alleging fraud against the United States and, if the lawsuit is successfully resolved, may share in as much as 25 to 30% of the government’s recovery, depending upon whether the government or the private party resolves the action. The False Claims Act permits recovery of triple the government’s damages and civil penalties ranging from $5,500 to $11,000 per false claim submitted.

This matter was handled by Assistant United States Attorney Harold Malkin and investigated by the HHS-OIG Office of Investigations.

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