On June 20, 2018 the Department of Justice tweeted that Healogics has agreed to pay up to $22.51 million to settle False Claims act liability for Improper billing of Hyperbaric oxygen therapy.
Healogics Agrees to Pay Up to $22.51 Million to Settle False Claims Act Liability for Improper Billing of Hyperbaric Oxygen Therapy https://t.co/YZPSkiwCN5
— Justice Department (@TheJusticeDept) June 20, 2018
“The settlement announced today resolves allegations that from 2010 through 2015, Healogics knowingly submitted or caused the submission of false claims to Medicare for medically unnecessary or unreasonable HBO therapy.”
Many of us in the hyperbaric medicine community have been expecting something to come down from the Department of Justice. Two independent parties filed these lawsuits under qui tam (whistleblowers provision of the False Claims Act). $17.5 million is to be paid initially with another $5.01 million if “certain contingencies occur within the next five years.”
Healogics has agreed to the settlement, which includes monetary fines as well as entering into a 5-year Corporate Integrity Agreement with the Department of Health and Human Services Office of the Inspector General.
The DOJ Northern District of Iowa has released a statement on the heels of the national tweet that Healogics has agreed to pay another $400,00 to resolve False Claims Act allegations that between “January 1, 2012, through June 30, 2017, Healogics submitted claims to Medicare, Medicaid, and Tricare using Modifier 25 to signify that a separate evaluation and management service was performed on the same date as another procedure when no such separate service was performed.”
Community Health Systems, in its quarterly filing with the Securities and Exchange Commission, outlined a number of legal proceedings that might affect their financial outlook. In their filing they mention that they are “responding to subpoenas and administrative demands concerning: a subpoena regarding wound care services at one of our Florida hospitals (which appears to be related to unsealed cases against Healogics, Inc.)”
It is interesting to remember that CHS has many legacy hospitals that were among the hospitals that were involved in the Office of Inspector General report, “Wisconsin Physicians Service Paid Providers for Hyperbaric Oxygen Therapy Services That Did Not Comply With Medicare Requirements.” The report estimated that WPS overpaid providers in Jurisdiction 5 about $42.6 million, and recommended that WPS try to recoup these overpayments.
These actions may have a chilling effect on the provision of hyperbaric services in the US. Already, some programs have chosen to close their facilities, despite the fact that the WPS claims data requested was from 2013 and 2014, and would not affect current reimbursement or practice. The ripple effect from the CMS Prior Authorization for Non-emergent Hyperbaric Oxygen Therapy project resulted in a reduction of over 60,000 hyperbaric oxygen treatments between 2015 and 2016. Despite the fact that this project was not extended, CMS has now empowered the MACs to start Targeted Probe and Educate (TPE) on services that have high error rates and are a financial risk to Medicare. Since HBOT error rates have been in the 50-60% range or higher in almost all the published audits, it is no small surprise that we are high on the list of services being audited.
Additional Reading from Today’s Wound Clinic: