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Civil Monetary Penalties and Affirmative Exclusions

The Office of Inspector General (OIG) has the authority to seek civil monetary penalties (CMPs), assessments, and exclusion against an individual or entity based on a wide variety of prohibited conduct. In each CMP case resolved through a settlement agreement, the settling party has contested the OIG's allegations and denied any liability. No CMP judgment or finding of liability has been made against the settling party.

OIG Enforcement Cases

The cases listed below represent recently-closed cases initiated by the OIG's Office of Counsel to the Inspector General. To view additional cases, including those resolved through the provider self-disclosure protocol, click on the specific categories to the right.

09-19-2016
New Jersey Medical Biller Settles False and Fraudulent Claims Case and Agrees to 5-Year Exclusion
On September 19, 2016, Susan Toy, entered into a $100,000 settlement agreement with OIG and agreed to be excluded from participating in Federal health care programs for a minimum of five years. On July 1, 2016, OIG issued a letter to Toy, proposing to impose a civil money penalty and program exclusion on her, pursuant to the Civil Monetary Penalties Law. The settlement agreement resolves OIG's allegations that Toy prepared and submitted claims for services that were never performed. Toy, through her health care billing company, prepared and submitted claims for an obstetrics and gynecology physician practice located in New Jersey. Toy was responsible for preparing and submitting claims based, in part, on superbills identifying the services purportedly performed during a patient encounter. OIG contended that Toy prepared and submitted claims for Current Procedural Terminology code 91122 (anorectal manometry) for patient encounters where the procedure was neither performed nor identified as performed on the superbill. Senior Counsels David Blank and Tamara Forys represented OIG with the assistance of Paralegal Specialist Mariel Filtz.
08-31-2016
Texas Pharmacy and Pharmacy Manager Settle Case Involving Excluded Individual
On August 31, 2016, Lifechek 336 Pharmacy, LLC, Lifechek Staff Services, Inc., and Bruce Gingrich (collectively, "Lifechek"), Texas, entered into a $30,000 settlement agreement with OIG. The settlement agreement resolves allegations that Lifechek employed an individual who was excluded from participating in any Federal health care program. OIG's investigation revealed that the excluded individual, a store manager and pharmacy technician, provided items or services that were billed to Federal health care programs. Senior Counsel Nicole Caucci represented OIG.
08-19-2016
Pennsylvania Audiology Practice Agrees to Voluntary Exclusion
On August 19, 2016, in connection with the resolution of False Claims Act liability, John Balko & Associates, Inc. d/b/a Senior Healthcare Associates (SHA), agreed to be excluded from participation in all Federal health care programs for a period of ten years under 42 U.S.C. 1320a-7(b)(7). OIG alleged that SHA knowingly and intentionally submitted or caused to be submitted claims for payment to Medicare for cerumen removal procedures, nail debridement procedures, and evaluation and management services using modifier-25, which were not medically necessary, were not authorized or requested by patients, were not supported by patient medical records, lacked required medical documentation, and/or were provided in reliance upon improper standing orders.
08-17-2016
Texas Hospice Provider Settles False and Fraudulent Medicare Claims Case
On August 17, 2016, Community Hospice of Texas (CHT), Texas, entered into a $34,986.68 settlement agreement with OIG. The settlement agreement resolves allegations that CHT submitted claims for hospice services at the general inpatient level of care when it knew or should have known that routine care should have been billed. Senior Counsels Geoffrey Hymans and David Traskey represented OIG.
08-12-2016
Arizona Physician Settles False and Fraudulent Medicare Claims Case
On August 12, 2016, Manith Mann, M.D., Arizona, entered into a $66,513.50 settlement agreement with OIG. The settlement agreement resolves allegations that Dr. Mann submitted claims for Healthcare Common Procedure Coding System code G0452 (molecular pathology procedure; physician interpretation and report) where: (1) no consultation request had been made; (2) no written narrative report by a consultant physician was produced; and (3) no exercise of medical judgement by a consultant physician was required. In addition, OIG contended that multiple units of this code may have been submitted for each patient encounter where multiple units may not have been medically necessary. Senior Counsels Kenneth Kraft and Geoffrey Hymans represented OIG.
08-04-2016
Georgia Podiatrist Settles False and Fraudulent Claims Case
On August 4, 2016, Janaki Nadarajah, DPM, Georgia, entered into a $115,000 settlement agreement with the OIG. The settlement resolves allegations that Dr. Nadarajah improperly submitted claims: (1) for nail debridement and other podiatric services rendered to patients in assisted living facilities when she neither personally performed nor supervised the service; and (2) for Dermagraft skin substitute not provided in accordance with the product's Food and Drug Administration-approved label and applicable Medicare rules.
08-02-2016
Texas Skilled Nursing Facility Settles Case Involving Excluded Individual
On August 2, 2016, PHCC-The Pointe Rehabilitation & Healthcare Center LLC d/b/a The Pointe Rehabilitation and Healthcare Center, and PHCC-Paramount Health Care Company, LLC (The Pointe), Webster, Texas, entered into a $408,159.53 settlement agreement with OIG. The settlement agreement resolves allegations that The Pointe employed an individual who was excluded from participating in any Federal health care program. OIG's investigation revealed that the excluded individual, an office manager, provided items or services to The Pointe patients that were billed to Federal health care programs. Senior Counsel Nicole Caucci represented OIG with the assistance of Paralegal Specialist Jennifer Hilton.
08-01-2016
Palestine Regional Medical Center in Texas Settles Case Involving a Patient Dumping Allegation
On August 1, 2016, Palestine Regional Medical Center (PRMC), in Palestine, Texas, entered into a $45,000 settlement agreement with OIG. The settlement agreement resolves allegations that PRMC violated the Emergency Medical Treatment and Labor Act (EMTALA) when it failed to provide stabilizing treatment and an appropriate transfer to a patient who presented to PRMC's emergency department. OIG's investigation revealed that a patient, who had a kidney transplant and was on dialysis, was waiting in the parking lot of a local dialysis center when she experienced significant shortness of breath. The patient was transported by ambulance to PRMC's emergency department, where she was diagnosed with acute pulmonary edema and discharged to receive dialysis on an outpatient basis. The patient arrived at the dialysis center where dialysis was started promptly, but the patient's condition deteriorated and she was taken back to PRMC's emergency department where she was pronounced dead. OIG's investigation concluded that PRMC failed to provide needed stabilizing treatment and an appropriate transfer when the patient presented to the emergency department the first time. Under EMTALA, hospitals can be fined up to $50,000 per violation. Senior Counsel Sandra Sands represented OIG.
07-29-2016
Missouri Pharmacy Settles False and Fraudulent Claims Case
On July 29, 2016, JSH Group, LLC (JSH Group), Missouri, entered into a $75,477.84 settlement agreement with the OIG. The settlement resolves allegations that JSH Group submitted claims to Medicare and Medicaid for Precision Xtra blood glucose test strips that JSH Group knew or should have known were not provided as claimed. Specifically, OIG alleged that JSH Group submitted claims for Precision Xtra blood glucose test trips that, based on inventory records, it could not have dispensed.
07-26-2016
Drug Testing Laboratory and Owner Agree to 7 Year Exclusion
On July 26, 2016, Nexus Medical Services, Inc. (Nexus), and its owner, French McClung (McClung), agreed to be excluded from participation in all Federal health care programs for a period of seven years under 42 U.S.C. 1320a-7(b)(7). OIG alleged that Nexus and McClung paid remuneration in the form of an inflated monthly rent payment to a physician's practice to sublease a portion of the practice's office space in exchange for referrals from the practice's physician owner to Nexus. OIG also alleged that Nexus and McClung employed an individual that they knew or should have known was excluded from participation in Federal health care programs.
07-20-2016
Oklahoma Behavioral Health Counseling Center and Owner Agree to 5 Year Exclusion
On July 20, 2016, LXE Counseling, LLC (LXE), and its owner, Lexie Darlene George a/k/a Lexie Darlene Batchelor (Batchelor), agreed to be excluded from participation in all Federal health care programs for a period of five years under 42 U.S.C. 1320a-7(b)(7). OIG alleged that LXE and Batchelor knowingly submitted claims to Medicaid for services not provided, services provided by unqualified individuals, telemedicine services not approved, as well as claims with falsified dates, codes, and lengths of service. Senior Counsels Kenneth Kraft and Nancy Brown represented OIG.
Florida Ambulance Company Settles Case Involving False Claims
On July 20, 2016, Courtesy Transport Services, LLC (Courtesy), of Northeast Florida, entered into a $362,188 settlement agreement with OIG. The settlement agreement resolves allegations that Courtesy submitted claims for emergency ambulance transportation to destinations such as skilled nursing facilities and patient residences that should have been billed at the lower non-emergency rate. OIG's Consolidated Data Analysis Center and Office of Counsel to the Inspector General, represented by Senior Counsels Geoffrey Hymans and Andrea Treese Berlin, collaborated to achieve this settlement.
Florida Pharmaceutical Company Settles Case Involving Drug Price Reporting
On July 20, 2016, Nephron Pharmaceuticals Corporation (Nephron), Florida, entered into a $60,000 settlement agreement with OIG. The settlement agreement resolves allegations that Nephron failed to submit certified monthly and quarterly Average Manufacturer's Price (AMP) data to the Centers for Medicare and Medicaid Services (CMS) for certain months and quarters in 2013, 2014, and 2015. The Medicaid Drug Rebate Program requires pharmaceutical companies to enter into and have in effect a national rebate agreement with the Secretary of Health and Human Services in order for Medicaid payments to be available for the pharmaceutical company's covered drugs. Companies with such rebate agreements are required to submit certain drug pricing information to CMS, including quarterly and monthly AMP data. Senior Counsel Nicole Caucci represented OIG.
South Carolina Pharmaceutical Company Settles Case Involving Drug Price Reporting
On July 20, 2016, Cipher Pharmaceuticals US LLC (Cipher), South Carolina, entered into a $60,000 settlement agreement with OIG. The settlement agreement resolves allegations that Cipher failed to submit certified monthly and quarterly Average Manufacturer's Price (AMP) data to the Centers for Medicare and Medicaid Services (CMS) for certain months and quarters in 2014, 2015, and 2016. The Medicaid Drug Rebate Program requires pharmaceutical companies to enter into and have in effect a national rebate agreement with the Secretary of Health and Human Services in order for Medicaid payments to be available for the pharmaceutical company's covered drugs. Companies with such rebate agreements are required to submit certain drug pricing information to CMS, including quarterly and monthly AMP data. Senior Counsel Nicole Caucci represented OIG.
07-14-2016
Colorado Hospice Settles Case Involving Excluded Individual
On July 14, 2016, Pinnacle Hospice Care (PHC), Colorado, entered into a $50,000 settlement agreement with OIG. The settlement agreement resolves allegations that PHC employed an individual who was excluded from participating in any Federal health care program. OIG's investigation revealed that the excluded individual provided items or services to PHC patients that were billed to Federal health care programs. Senior Counsel Ellen Slavin represented OIG with the assistance of Paralegal Specialist Eula Taylor.
07-11-2016
OIG Excluded Alabama Physician
Effective July 11, 2016, OIG excluded Bobby Merkle, MD, from participation in all Federal health care programs for a period of three years under 42 U.S.C. 1320c-5 following a referral to the OIG by Kepro, the Beneficiary and Family Centered Care Quality Improvement Organization (QIO). OIG's investigation determined Dr. Merkle violated his obligations to provide services to five Medicare beneficiaries: (1) when, and to the extent, they were medically necessary; (2) of a quality that met professionally recognized standards of care; and (3) supported by the appropriate evidence of medical necessity and quality in a form and fashion and at such time as they were required by the QIO. Dr. Merkle violated his obligations through prescription practices and choices of medications which violated professionally recognized standards of care, through documentation that did not support the proper management of chronic conditions or diseases in the patients, through failure to assess pain or response to treatment in patient with chronic pain, and for failure to document response to treatment or patient progress for pain, edema, or gastrointestinal upset. Senior Counsels Geoffrey Hymans and Kenneth Kraft represented OIG.
07-07-2016
Regional One Health in Tennessee Settles Case Involving a Patient Dumping Allegation
On July 7, 2016, Regional One Health (ROH), in Memphis, Tennessee, entered into a $45,000 settlement agreement with OIG. The settlement agreement resolves allegations that ROH violated the Emergency Medical Treatment and Labor Act (EMTALA) when it failed to provide an adequate medical screening examination and stabilizing treatment to a patient and inappropriately transferred the patient to another hospital. The patient presented at ROH with complaints of sudden pain in the lower right quadrant of his abdomen. OIG's investigation revealed that despite the fact that ROH was aware of the patient's abnormal lactic acid levels and perforated viscus, ROH failed to fully evaluate the severity and cause of the patient's emergency condition and failed to provide the patient stabilizing treatment for sepsis. Instead, ROH transferred the patient to another hospital, even though ROH was capable of providing the highest level of care to the patient. OIG contends that the transfer by ROH was inappropriate because the patient was not informed of the risks of transfer, the benefits of transfer did not outweigh the risks, and the transfer unnecessarily cause a delay in the patient's care. The patient died due to septic shock and respiratory failure within a week of his transfer by ROH. Under EMTALA, hospitals can be fined up to $50,000 per violation. Associate Counsel Srishti Miglani represented OIG.

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