Allegations Punch ENT in the Nose. He Sinuses Off on Multi-Million Dollar Settlement.

December 13, 2021

Another day, December 8, 2021, to be exact, another $4.2 million.

That’s the settlement the government will receive in total from an ENT, Jeffrey M. Gallups, M.D., the founder, owner, medical director, and past-CEO of Georgia-based Milton Hall Surgical Associates (“MHSA”) a/k/a The Ear, Nose & Throat Institute, and medical device maker Entellus Medical to settle kickback allegations in violation of the federal Anti-Kickback Statute.

Originating from a whistleblower suit filed by a former MHSA physician, the government alleged that Dr. Gallups received kickbacks from Entellus in various forms including cash and all-expense-paid trips, in return for Gallups requiring MHSA’s dozen-plus physicians to use Entellus’s sinuplasty medical devices and to increase the number of sinuplasty procedures conducted on patients (and, therefore, increase the volume of Entellus devices sold).

Although allegations are simply allegations, and in resolving them there was no admission of culpability, Gallup agreed to pay $1.2 million, and Entellus (through its new owner, Stryker Corporation) agreed to pay $3 million, to resolve the civil case.

Interestingly, the same settlement resolves civil allegations against Gallups that he also entered into a kickback arrangement with NextHealth, LLC, a now-defunct medical testing laboratory. Pursuant to the government’s claims, Gallups directed MHSA physicians to order toxicology and genetic tests from NextHealth over physician objections that the tests were not medically necessary. Gallups allegedly received 50% of NextHealth’s revenue from the ordered tests.

The name “NextHealth” may sound familiar to you.  Our June 1, 2020 post, Two Frauds Aren’t Better Than One: Second of the NextHealth & Forest Park Fraud Twins Sentenced, recounted the sentencing of NextHealth’s two principals, Semyon Narasov and Andrew Hillman, for various kickback-related schemes.

And, although the settlement involving Dr. Gallups discussed above relates to civil claims, on October 21, 2021, Dr. Gallups pleaded guilty to health care fraud, that is, criminal allegations, relating to NextHealth.

Some Takeaways For You

1. Kickbacks are big business, both for those paying and collecting them, but also for the government.

2. Civil allegations, whether or not arising from whistleblower claims, make the government a dollar-on-dollar return that makes Warren Buffett look like a beginner.

3. Civil allegations can be settled, but doing so rarely involves the resolution of potential criminal allegations. You can pay up in dollars and then pay up later with time, time behind bars, that is.

4. Yeah, I have a dog in the race, but get competent legal advice before agreeing to get anything of value, including a discount, from someone or some entity with whom you do business or with whose business you can impact referrals. You don’t want to gallop down the same road as Gallups, do you?

Leave a Reply