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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Monday, October 22, 2018

Manhattan U.S. Attorney Announces Settlement Of Fraudulent Billing Claims Against Vascular Access Centers, L.P.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has settled civil healthcare fraud claims against VASCULAR ACCESS CENTERS, L.P., and related entities (collectively, “VAC”), for their submission of fraudulent claims for reimbursement by Medicare for vascular surgical procedures not covered under Medicare.  In connection with the settlement, which was approved on October 19, 2018, by U.S. District Judge Lorna G. Schofield, VAC agreed to pay at least $3.825 million and up to $18.3 million to resolve its False Claims Act liabilities.  In the settlement, VAC also admitted to and accepted responsibility for its conduct.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “For years, Vascular Access Centers cheated taxpayers out of millions of dollars by billing Medicare for treatments that were clearly nonreimbursable, and in some cases by falsifying medical records to make it seem as if its billings were justified.  Through this settlement, VAC is being made to account for its misconduct.”

HHS-OIG Special Agent in Charge Scott Lampert said:  “Performing and billing for surgical procedures not allowed under Medicare rules will not be tolerated.  We will continue to work with our law enforcement partners to investigate these deceptive practices.”

According to the complaint filed in Manhattan federal court:

Patients with end-stage renal disease (“ESRD”) who are receiving dialysis may require vascular access surgical procedures, such as fistulagrams, where dye is injected into the patient’s vein or artery to visualize blood flow, and percutaneous transluminal angioplasties, in which wires and balloons are inserted into blood vessels that have narrowed in order to restore blood flow.  However, according to applicable Medicare billing rules, fistulagrams and angioplasties are not to be performed, and are not reimbursable, unless the patient has specific and documented clinical problems, such as significant difficulty receiving dialysis properly. 

During the relevant period, from July 2012 through December 2016, VAC operated at least 22 office-based surgical sites in 12 states and Washington, D.C.  VAC’s patients primarily consisted of ESRD patients undergoing dialysis treatment.  As a regular practice, VAC scheduled patients for fistulagrams and angioplasties three months in advance, and VAC performed fistulagrams and angioplasties on these patients as a matter of routine, regardless of whether there was a justifiable clinical reason to do so.  Furthermore, VAC sometimes misrepresented the medical conditions of patients in its medical records to make it seem as if they suffered from symptoms that would warrant the procedures.  VAC unlawfully billed Medicare for these procedures, which were excluded from Medicare coverage by the applicable rules.

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As part of today’s settlement, VAC admitted that its centers regularly performed, and billed Medicare for, vascular surgery procedures as a prophylactic or screening measure, even though the patients presented without any documented evidence that they exhibited a need for therapies.  VAC also agreed to make payments totaling at least $3.825 million and up to $18.3 million over five years, based on its ability to pay and depending on certain financial contingencies.  In addition, VAC entered into an integrity agreement with HHS-OIG, through which it agreed to implement compliance measures and submit to monitoring by HHS-OIG.  Simultaneous with the settlement of this action, the United States is also settling a different lawsuit against VAC filed in the United States District Court for the Eastern District of Louisiana with overlapping claims.

The allegations of fraud stated in the Complaint were first brought to the attention of federal law enforcement by a whistle-blower who filed a lawsuit under the False Claims Act.

The case is being handled by the Office’s Civil Frauds Unit.  Assistant United States Attorney Jean-David Barnea is in charge of the case.

Topic(s): 
Health Care Fraud
Press Release Number: 
18-362
Updated October 22, 2018