Subscribe Now
Forgot Password?

Weekly News, Analysis, and Commentary

Legal & Regulatory Feature

Sources: Public Domain

Florida Orthopedic Group Settles False Claims Lawsuit

Jessica Mehta • Thu, January 5th, 2017

Print this article

The Southeast Orthopedic Specialists (SOS) reached a settlement with the Department of Justice (DOJ) December 7, 2016 regarding the alleged filing of millions of dollars in false insurance claims. SOS (previously Heekin Orthopedic Specialists) worked with Assistant U.S. Attorney for the case, Jason Mehta, to reach the $4.488 million settlement.

The case against Southeast Orthopedic Specialists was filed in Jacksonville, Florida, and, addition to “certain civil claims, ” alleged that SOS billed federal healthcare programs for numerous services that weren’t reasonable or medically necessaryBy settling these allegations, SOS does not admit that the claims are correct but effectively stops the lawsuit.

The Department of Health and Human Services (DHHS) was the chief investigating organization in this case and it was the Health Care Fraud Prevention and Enforcement Action Team (HEAT) that initiated the settlement talks. Also weighing in was the Secretary of Health and Human Services as well as the U.S. Attorney General.

Jacksonville’s Southeast Orthopedic Specialists was established in 2001 and currently includes 13 physicians and over 200 personnel at six Florida locations. No specific physicians or medical individuals were named in the allegations. SOS specializes in stem cell regenerative therapy, spine care, joint replacement, hand and wrist care, foot and ankle care, sports medicine, physical therapy, and has an emergency orthopedic program.

The Government’s Case

In its case, the DOJ alleged that “millions of dollars” in debatable claims were filed by SOS with intent to illegally inflate profits. For example, one of the government’s claims was that SOS certified that a procedure “met certain standards” equating to meaningful use of health records—but that those standards were never met. Settlement notes claim SOS billed for claims tagged as having a physician present, when allegedly there was no physician on site and/or no verification.

Allegations say SOS utilized ultrasound-guided injections, billing for them regularly, although it wasn’t deemed “medically necessary.” SOS also allegedly billed for a variety of physical therapy appointments under Modifier KX, which exceeded Medicare caps, in cases that weren’t medically necessary. With on-site rehab centers at each SOS location, the government claims that SOS knowingly billed Medicare for unnecessary physical therapy (PT) appointments.

Medicare limits how many PT appointments a patient can receive, but the DOJ claims SOS took advantage of the billing modifier code meant to be for special medical needs. SOS allegedly used the code to supersede the Medicare limit, and additional PT rounds were ordered for SOS patients whether they needed them or not. Prosecuting Attorney Mehta says, “Almost every single patient that got physical therapy always received more than they needed.”

The government alleged that, in many cases, SOS appeared to have planned excessive and unnecessary appointments in advance. For instance, SOS billed for claims under Modifier 25, implying that a management and evaluation service should be performed separately. However, there’s no such protocol for a separate service.

Modifier 59 was used frequently by SOS. It requires two procedures instead of one. The DOJ points out that it was more appropriate (and cost-efficient) to bill as one procedure. More importantly, billing as one procedure was the correct and legal approach. Government prosecutors say SOS preferred to schedule post-operative visits at the 14-week mark instead of the standard 12. The DOJ suggests this was to secure a separate visit billing, falling outside the standard Medicare 90 days “Diagnosis-Related Group charge.”

The DOJ claims that SOS lied to the government about their adoption of the required system to electronically track medical records. As part of the 2009 Affordable Care Act, healthcare providers are required to maintain e-copies of medical records in order to get full reimbursement. Although SOS had signed documents stating that they were following that regulation, the U.S. Attorney’s Office says SOS only started wholly utilizing e-records when audits and false claims allegations began. Prosecuting Attorney Mehta says, “For a practice that prides itself on being the preeminent place in the city, it’s unfortunate that they would just sort of lie about something pretty blatant like this.”

$31.6 billion in False Claim Act Lawsuits

In the past seven years, the DOJ has succeeded in securing over $31.6 billion via False Claims Act lawsuits and settlements. Over $19 billion was for fraud involving federal health care programs like Medicare and Medicaid. Shimon Richmond, Special Agent in Charge at the DHHS-Office of Inspector General (OIG), says, “The Department of Health and Human Services, Office of Inspector General will relentlessly seek out those who defraud the Medicare program. Obtaining tax dollars which Medicare providers are not entitled to impacts our entire healthcare system and the OIG will hold health care providers accountable who misrepresent services to boost profits.”

A. Lee Bentley, a U.S. attorney representing the DOJ’s focus on false claims, says, “The United States Attorney’s Office is committed to taking the steps necessary to protect Medicare and other federal health care programs from fraud. When health care practitioners submit fraudulent claims for reimbursement, we will hold them accountable.”


The now aptly named “SOS” orthopedic surgery group admitted to no wrongdoing in the settlement. SOS signed a corporate integrity agreement and was required to contract with a third-party auditor indefinitely for future claims. SOS can remain open and operative, but only under increased scrutiny. SOS and their attorneys, Holland & Knight, have no comment.

Assistant U.S. Attorney Mehta says the SOS was cooperative and responsive, which helped with a fast resolution. He’s building quite a reputation in the Florida false claims circuit, securing $7.14 million in a false claims settlement in August 2016 with the Coastal Spine and Pain clinic located in Jacksonville—a case with similar allegations as the SOS settlement. When asked about SOS, Mehta said, “You would expect that they would care more about patient care than they do about reimbursement.”

The quick settlement has helped keep the SOS allegations largely under the radar. SOS has previously made headlines for less scandalous achievements, such as stem-cell based therapy practices just formalized in 2015. BizJournal featured the therapy in August 2015, citing SOS’ stem cell therapy as ranging from $300 - $6, 000 with insurance companies rarely covering these procedures. The stem cell therapy feature notes “Patients are getting billed as though they’ve seen a doctor when in reality they’re being seen by technicians who aren’t necessarily being supervised. And that’s to the tune of hundreds of thousands of dollars.”

Before the Name Change

SOS has only operated under the Southeast Orthopedic Specialist name since 2014. From 2001 – 2014, it was Heekin Orthopedics. A 2014 video posted on the SOS website says the name change was to “better reflect the regional level of service the 14 Fellowship trained physicians provide.” In the same video, Dr. Gavan Duffy says, “We made this change to reach further out into the community and broaden the scope of services we provide to patients.”

However, the name change also coincides with the leaving of Dr. Heekin, the original founder of the orthopedic group. Reviews of business practices under the Heekin Orthopedics name reveal an array of displeased patients. One former patient who chooses to remain anonymous says his experience with Heekin Orthopedics showed him that “There are doctors out there that are more interested in billing your insurance company for as much as they can by performing unnecessary surgery as the course of treatment rather than what may be best for you.” This comment was well before any false claims allegations against SOS were filed.

Fortunately, Prosecuting Attorney Mehta says that no patients seem to have been harmed by SOS’ practices. Still, he notes, “Generally, people don’t pay $4.5 million unless there’s something to pay it for.” SOS is currently open for business, seeing patients, and accepting new patients.

Send to a Friend

The article link will be sent to the email address you provide

Your Name (required)

Your Email (required)

Friend's Email (required)


Leave a Reply


Email Address (will not be published)