DOJ settles False Claims Act allegations with Seattle physician, his pain clinics, and his drug-testing lab
Agrees to pay $2.85 million to settle allegations his clinics ordered medically unnecessary urine tests at his lab, paid for by government healthcare programs
Seattle - The U.S. Department of Justice and the Washington State Attorney General today settled a False Claims Act investigation involving Seattle Pain Center, Northwest Analytics, and owner/physician Dr. Frank Danger Li, announced First Assistant U.S. Attorney Tessa M. Gorman. Dr. Li agreed to pay $2.85 million to state and federal authorities to settle allegations his companies billed government entities for medically unnecessary urine drug tests. Dr. Li’s seven pain clinics closed in July 2016 when the Washington State Medical Quality Assurance Commission suspended his medical license for improperly monitoring prescriptions of powerful opioids. Today’s settlement is a civil resolution unrelated to any criminal investigation or any action by state health regulators.
“Prescribing massive quantities of addictive opioids fed a crisis that continues to grip our community,” said First Assistant U.S. Attorney Gorman. “This billing for unnecessary urine tests is a way Dr. Li and his clinics profited on the pain of others. It is appropriate that we return these dollars to the government entities that were defrauded.”
“Our investigation helped stop Dr. Li and the providers he supervised from continuing to prescribe dangerous and excessive amounts of opioids,” Ferguson said. “Now we’re reclaiming more than one million Medicaid dollars for the unnecessary drug tests he ordered for his opioid prescription practice. These recouped dollars will cover medical costs for vulnerable Washingtonians, as it was intended.”
According to the settlement agreement, in addition to his pain clinics, Dr. Li owned drug-testing labs in Seattle and Everett. Northwest Analytics did urine drug testing for Li’s clinics. In July 2013, Li instituted a policy that, in nearly every instance, each patient being treated at Seattle Pain Centers had to have a full urine drug test panel every time they were seen by a provider. This policy resulted in thousands of medically unnecessary tests. The testing protocol did not follow state standards which recommended random testing of up to four times per year.
“Physicians have a responsibility to provide appropriate medical care and to bill federal health care programs properly. When Dr. Li – who our agency excluded from participating in Medicare and Medicaid programs – billed for medically unnecessary lab tests, our investigators acted decisively to hold him accountable,” said Special Agent in Charge Steven J. Ryan of HHS-OIG. “Physicians tempted to engage in such fraudulent activities should remind themselves of their professional obligations and the consequences of flouting them.”
“Performing needless medical services, especially those motivated by financial gain and not medical necessity, drains resources from legitimate patient care,” said Bryan Denny, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Western Field Office. “DCIS and our investigative partners will fully investigate and bring to justice those who deprive the Department of Defense of limited resources needed for the healthcare of our military, veterans, and their families.”
The settlement funds are divided as follows: restitution to Medicare of $1,590,265; restitution to TriCare of $123,000; restitution to the Railroad Retirement Board of $2,672, and restitution to Medicaid of $1,134,151 ($453,796 federal funds and $680,354 state funds). The settlement agreement details how the funds are to be paid over five years and various ways that the government claims are secured. The settlement amounts are based in part on Dr. Li’s ability to pay.
Dr. Li does not admit any wrongdoing as part of this settlement.
The investigation was coordinated by the Health and Human Services Office of Inspector General (HHS-OIG).
The matter was handled by Assistant United States Attorney Kayla Stahman as part of the U.S. Attorney’s Office’ Affirmative Civil Enforcement Unit. The Washington State Attorney General’s Medicaid Fraud Unit participated in the investigation and was represented in the settlement by Senior Counsel Carrie L. Bashaw.