Perhaps the target wasn’t Day-Glo orange, but the wound was life changing, if not life threatening.
More often than not, whistleblowers file False Claims Act lawsuits against the entity they allege as being at the center of fraudulent activity, for example, the entity that is paying kickbacks. Whether that entity is a hospital, an ambulatory surgery center, or an implantable device manufacturer, the entity is typically the prime target because it’s the nexus of the claims that the whistleblower alleges are fraudulent.
Because the entity is, metaphorically speaking, painted Day-Glo orange with a gun range target on its front, back, and sides, many physicians involved in questionable “arrangements” often feel that they won’t be swept up in the mess, that their risk is smaller.
Bypassing the issue of the difference between a feeling and either thinking or knowing, they are wrong.
Back on March 16, 2020, in my post, Free Stay Out of Jail Pass, I wrote about the FCA lawsuit in which the United States government intervened and alleged that SpineFrontier, a spine device manufacturer, and Kingsley Chin, M.D., its founder and Chief Executive Officer, as well as other Chin-controlled entities, paid spine surgeons over $8 million in sham “consulting” payments ostensibly for product evaluations, when in fact the payments were for the use of SpineFrontier devices.
In the weeks that passed, the government settled civil health care fraud claims against five physicians, each of whom admitted to seeking and obtaining kickbacks from SpineFrontier via a sham intermediary called “IME,” for consulting work he did not perform, and then cooperated with the government’s investigation. Each of the five also admitted that one or more of SpineFrontier, Chin, or Aditya Humad, the CFO of SpineFrontier and a defendant, specifically instructed him to bill “consulting” hours to SpineFrontier for each and every surgery in which he used a SpineFrontier device, regardless of whether he spent any time actually consulting.
The five physicians are:
1. Dr. F. Paul DeGenova, an orthopedic spine surgeon in Ohio, agreed to settle the government’s claims for $486,985.
2. Dr. Michael Murray, an orthopedic spine surgeon in New York employed by the Department of Veteran Affairs, agreed to settle the government’s claims for $330,668.
3. Dr. Joseph Shehadi, a neurosurgeon in Ohio, agreed to settle the government’s claims for $323,419.
4. Dr. Agha Khan, a neurosurgeon in Maryland, agreed to settle the government’s claims for $310,843.
5. Dr. John Atwater, an orthopedic surgeon who worked in Florida and in Illinois, agreed to settle the government’s claims for $105,149.
And then, on April 24, 2020, Dr. Jeffrey R. Carlson, an orthopedic surgeon in Virginia, became the sixth surgeon to agree to settle with the government in connection with SpineFrontier. The “price” for his deal was astronomically higher: he agreed to pay $1.75 million to resolve the civil claims.
Dr. Carlson admitted that he estimated his purported consulting hours based on the number of times he used a SpineFrontier product in a given month, as opposed to tracking actual time he spent consulting. He admitted that he cannot document the consulting hours he submitted for payment to SpineFrontier and IME.
In addition, he admitted that he sought and received consulting payments from SpineFrontier for time he spent during his surgical procedures, for which Medicare and other federal health care programs were already paying him.
Last, Dr. Carlson also admitted to accepting free meals from SpineFrontier, for himself and his surgical staff, on almost every day that he performed a surgical procedure with a SpineFrontier product. In total, SpineFrontier provided Dr. Carlson and his staff meals that cost thousands of dollars.
Note that each of the settlements, which one may safely assume was made without admission of liability, relates to a civil action, only. However, you should bear in mind that the type of activity that was alleged to have occurred underlying the FCA allegations would also support criminal charges for violation of the federal Anti-Kickback Statute should the government bring them.
In other words, these civil settlements may not be the end of the matter for Drs. DeGenova, Murray, Shehadi, Khan, Atwater, and Carlson.
Of course, the same lesson, potential civil and criminal liability applies to anyone caught up in a kickback mess.
As I always say, think like a carpenter and measure twice (or even thrice), vetting each deal carefully with healthcare counsel, before cutting once, cutting your own neck, that is.
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss
