Hospital Medicare Fraud Settlement

Birmingham (Michigan) law firm Vezina Law, PLC announced a $2.9 million settlement of a False Claims Act lawsuit between the United States of America, acting through the United States Attorney’s Office for the Middle District of Tennessee and on behalf of the Office of Inspector General (“HHS-OIG”) of the Department of Health and Human Services (“HHS”) (collectively, the “United States”) and Tenet Healthcare Corporation (“Tenet”), Vanguard Health Services, Inc. (“Vanguard”), Vanguard Physician Services, LLC (“VPS”), Abrazo Health Systems (“Abrazo”), and Arizona Heart Institute, LLC (“AHI”) (collectively, “Defendants”). Tenet is an investor-owned healthcare services company based in Dallas, Texas. Tenet owns and operates numerous for-profit hospitals and medical facilities across the United States. In September 2013, Tenet completed its purchase of Vanguard, an operator of for-profit hospitals and other medical facilities headquartered in Nashville, Tennessee. At the time of Tenet’s acquisition of Vanguard, Vanguard owned and operated numerous subsidiary companies, including Defendants VPS, Abrazo, and AHI.

The settlement arises from a 2013 lawsuit filed by Relator Jacque Lee, a healthcare management professional at MedSynergies, Inc. (a joint venturer with Vanguard prior to Tenet’s acquisition) in the United States District Court for the Middle District of Tennessee captioned United States ex rel. Lee v. Vanguard Health Services, Inc. et al. , 3:13-cv-0171, pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. § 3730(b). The False Claims Act allows private individuals with knowledge of fraud against a government program to file lawsuits on the government’s behalf. If the case is successful, the private plaintiffs, known as “relators,” are entitled to a percentage of the government’s recovery. The False Claims Act provides for recovery of treble (triple) the single damages incurred by the government as a result of the fraud, as well as civil monetary penalties of between $5,500 and $11,000 per false claim submitted and statutory attorney fees. In this case, the relator will receive 18% of the recovery.

The settlement resolves allegations that Vanguard and its above-referenced subsidiary corporations violated the False Claims Act (“FCA”) by billing federal healthcare programs for services that (1) were not properly supervised by a physician; (2) were performed by medical “fellows” but billed under NPI numbers belonging to other AHI physicians; (3) were upcoded and billed using CPT codes that did not accurately reflect the work done by AHI physicians; and (4) were provided by Vanguard and its subsidiaries pursuant to compensation arrangements with AHI physicians that violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, et seq. (“AKS”) and the Stark Law, 42 U.S.C. § 1395nn (“Stark”). The United States intervened in the case, contending that between October 2010 and October 2013, remuneration paid by AHI to Drs. David J. Caparrelli, Neil J. Goldberg, Venkatesh G. Ramaiah, Julio A. Rodriguez-Lopez, Robert K. Strumpf, Grayson H. Wheatley, III, and Claudio G. Zamorano, in the form of salaries and bonuses, violated the AKS and Stark and resulted in the submission of false claims for designated health services provided at AHI. The United States also contended that false claims were submitted to Medicare under Dr. Strumpf’s provider number for cardiac rehabilitation services performed at AHI which were not properly supervised. Finally, the United States contended that false claims were submitted to Medicare for Evaluation and Management services rendered by AHI physicians which were billed at a higher level CPT code than was supportable, a practice known as “upcoding.”

Relator was represented by Monica P. Navarro and J. Marc Vezina, partners at Vezina Law, PLC, a member of the Vezina Law Group with offices in Birmingham, Michigan and New Orleans, Louisiana. The United States was represented by Assistant U.S. Attorney Chris Sabis from the Middle District of Tennessee.

Vezina Law, PLC is a full-service law firm with over $500 million in False Claims Act/Qui Tam recoveries.