False Claims Act

False Claims Act Settlement Skins Plastic Surgeon For Close To $24 Million And Extracts An Additional Pound Of Flesh

May 8, 2023

Although it’s certainly preferable to being skinned alive, the U.S. Department of Justice recently announced a $23.9 million civil False Claims Act settlement with a Beverly Hills plastic surgeon, his medical practices, his businessman son, and their billing company to resolve allegations that they violated the False Claims Act by submitting or causing the submission of false claims to both Medicare and Medicaid.

Originating with multiple whistleblower actions filed by a podiatrist and others working with the plastic surgeon and his medical practice, the settlement resolves allegations that Dr. Joel Aronowitz and his related entities, Joel A. Aronowitz, M.D., a medical corporation, Tower Multi-Specialty Medical Group, Tower Wound Care Center of Santa Monica, Inc., Tower Outpatient Surgery Center, Inc., and Tower Medical Billing Solutions, together with Dr. Aronowitz’s son, Daniel Aronowitz, falsified the place of service for skin grafts and billed multiple times for single-use skin substitute products.

As to the place of service allegations, the government contended that the settling parties made claims stating that wound-care procedures involving single-use skin substitutes that were actually performed in one location, for example, in the medical practice setting, were performed in both the medical practice setting and in the ASC setting.

Additionally, the government alleged that Dr. Aronowitz failed to properly dispose of unused portions of single-use skin graft materials and, instead, used them in later procedures involving other Medicare and Medicaid beneficiaries, resulting in thousands of instances of double billing.

In addition to the monetary settlement, the parties agreed that Dr. Aronowitz and Tower Multi-Specialty Medical Group will be excluded from Medicare, Medicaid, and all other federal health care programs for a period of 15 years, and that Daniel Aronowitz, who was the CEO of Tower Medical Billing Solutions and the Director of Revenue Cycle Management for Tower Wound Care Center of Santa Monica, will be excluded for three years.

Note that the whistleblowers’ and the government’s allegation were just that, allegations, and that the settlement resolves them without any admission of liability and without any determination of liability.

The general takeaways for you

1. Be extremely diligent when submitting claims for reimbursement to any third party payor, whether or not it’s a federal health care program. Unfortunately, this rule applies even if you’re not the one finalizing the submission of claims: Physicians suffer from the false claims made negligently or intentionally by office, management company, and billing company staff.

2. It’s almost universally the case that whistleblowers come from within your practice or organization, including other physicians with whom you are associated, such as within your medical practice or within your surgery center, or from business associates such as outside billing services, a/k/a revenue cycle management companies.

3. False Claims Act civil settlements are not necessarily the end of any particular story because they do not resolve potential criminal liability for the same underlying acts. You can settle civil allegations in the morning and be arrested before the end of lunch.

4. Engage in an active, not a passive, compliance program, which is far more than having a “compliance plan”.

5. False Claims Act civil settlement agreements are not generally made public, but the one in the Aronowitz matter was. Contact me if you’d like a pdf copy.

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