False Claims Act (FCA) Update: DOJ Files Suit for Wound Care Fraud
The Department of Justice recently filed a complaint under the False Claims Act against entities and physicians for alleged fraud in connection with claims to Medicare for wound care treatment. DOJ alleged in the complaint a widespread scheme to overbill Medicare for medically unnecessary and upcoding for wound care services. The case reflects DOJ’s ongoing commitment to enforcing the False Claims Act in the healthcare industry, particularly in cases involving improper billing practices and fraud against federal healthcare programs, like Medicare.
Filed in the Southern District of Florida, the FCA complaint alleges a scheme to submit claims for wound care services over a roughly eight-year period. The services, according to the complaint, were either medically unnecessary, reflected upcoding or both.
Key allegations in the complaint
At the core of the False Claims Act wound care case are four primary allegations:
Upcoding Procedures:
Vohra physicians allegedly performed wound care services but fraudulently billed them as more intensive and higher-reimbursed surgical excisional debridements. This practice, known as upcoding, resulted in millions of dollars of improper payments from Medicare.Falsification of Medical Records:
The complaint alleges how the entities Electronic Medical Record (EMR) system automatically generated fabricated procedure notes. Physicians had limited ability to document true clinical details, and the EMR inserted pre-populated language suggesting surgical procedures had been performed, even when they had not.Internal Pressure to Inflate Billing:
The entities allegedly set aggressive corporate targets that required physicians to perform high numbers of surgical debridements, regardless of medical necessity. Physicians who failed to meet quotas faced disciplinary action, while those who exceeded the quotas were financially rewarded.Extraordinary Medicare Reimbursements:
From 2019 to 2023 alone, the charged entities allegedly collected over $300 million in paid claims from Medicare tied to this alleged scheme.
DOJ will continue to use FCA cases to protect federal programs
DOJ’s complaint seeks treble damages and civil penalties under the False Claims Act. The prospect of treble damages after trial is one of the most powerful tools in combating healthcare fraud.
DOJ reiterated how this case reflects its efforts to protect Medicare’s financial integrity and hold healthcare providers accountable for putting profit over patients. DOJ also stressed that fraudulent-billing practices, like upcoding, drains resources intended for the nation’s seniors and other vulnerable populations.
Key takeaways from the wound care complaint
The wound care complaint highlights several relevant issues for healthcare enforcement going forward:
Technology Misuse
The FCA complaint emphasized that the at-issue EMR system was intentionally programmed to maximize billing and create misleading medical records. This allegation shows DOJ’s increasing scrutiny of how technology platforms can be used to facilitate fraud.
Pressure-Driven Misconduct
The FCA complaint’s allegations about high-pressure tactics—such as setting revenue-based quotas for medical procedures—can be a critical piece of evidence in an enforcement action. DOJ alleged that the entities’ corporate culture was a key contributor to the alleged fraudulent claims submitted to Medicare.
High-Dollar Cases
With over $300 million in allegedly false claims to Medicare, this case represents DOJ’s ongoing efforts to charge high-impact cases.
Going forward
This complaint will bring more attention to the practices of wound care clinics and physicians. Be on the lookout for “copy cat” or similar cases from DOJ, both in the civil and criminal context.
Scott Armstrong, a former Assistant Chief at DOJ’s Fraud Section, defends physicians, owners in executives in healthcare fraud cases around the country. Email Scott Armstrong to learn how to learn how to defend yourself in a healthcare investigation.
