WASHINGTON – Philadelphia-based Vascular Access Centers L.P., along with its 23 subsidiary and related corporations (collectively “VAC”), has agreed to pay at least $3.825 million to resolve claims that it violated the False Claims Act by billing Medicare for non-reimbursable vascular access procedures performed on End Stage Renal Disease (ESRD) beneficiaries and engaging in an alleged kickback scheme related to referrals for such procedures, the Department of Justice announced today.
The settlement resolves allegations that VAC, which currently operates facilities in eight states, billed Medicare for vascular access surgical procedures performed on ESRD beneficiaries, including fistulagrams and percutaneous transluminal angioplasties, without all of the required medical documentation supporting the necessity of the procedures. The settlement also resolves allegations that VAC submitted false claims to Medicare for services that resulted from referrals that VAC had induced through improper remuneration to physician investors and medical directors, in violation of the Anti-Kickback Statute. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.
VAC has agreed to pay a minimum of $3.825 million in a series of fixed payments over five years, and could pay up to a maximum of $18,360,794, if certain contingencies are triggered.
“Medicare patients with End Stage Renal Disease, like other beneficiaries, are entitled to receive care in accordance with their clinical needs and not based on the financial interests of healthcare providers,” said Assistant Attorney General Joseph H. Hunt for the Department of Justice’s Civil Division. “Entities and individuals that attempt to profit through improper financial incentives and thereby bypass independent clinical decision-making will be held accountable.”
“Medicare fraud hurts not only patients and honest practitioners, but all taxpayers who pay hard-earned dollars into the nation’s public fisc,” said United States Attorney for the Eastern District of Louisiana Peter G. Strasser. “The favorable resolution of this False Claims Act matter illustrates our firm commitment to use all available remedies, both civil and criminal, to attack healthcare fraud at its source.”
VAC has also entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG), requiring the company to engage in significant compliance efforts over the next five years, including a focus on VAC’s arrangements with physicians and other health care providers for compliance with the Anti-Kickback Statute.
“Our Corporate Integrity Agreement provides future protection for patients and federal health care programs through controls and monitoring designed to ensure that VAC only provides medically necessary services to patients,” said Gregory E. Demske, Chief Counsel to the Inspector General for the United States Department of Health and Human Services. “Our CIA will also help try to ensure that doctors who are referring patients for medical procedures are doing so based on the best interest of the patient, and not based on financial considerations.”
The settlement resolves allegations originally brought in two lawsuits filed by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The whistleblowers will collectively receive at least $612,000 as their share of the settlement.
The United States’ investigation in one case was handled by the U.S. Attorney’s Office for the Southern District of New York, and in the second case was a coordinated effort by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Louisiana. The Department of Health and Human Services Office of Inspector General assisted in both investigations.
The cases are captioned United States ex rel. Levine v. Vascular Access Centers, L.P., et al., Case No. 12-civ-5103 (S.D.N.Y.), and United States ex rel. Boogaerts, et al. v. Vascular Access Centers, L.P., et al., Case No. 2:17-cv-02786-EEF-KWR (E.D. La.).
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