The Department of Justice (DOJ) has reported that it reached a settlement in a case where the DOJ had alleged that an Oklahoma-based orthopedic center, its management company, a physician group and two physicians of 12 years of improper payments.
The settlement includes Oklahoma Center for Orthopaedic and Multi-Specialty Surgery (OCOM), USP OKC, Inc. and USP OKC Manager, Inc. (together USP), Southwest Orthopaedic Specialists, PLLC (SOS), and two SOS physicians. Oklahoma City-based OCOM is a specialty hospital in which physicians have an ownership or investment interest. USP is part-owner of and manages OCOM. SOS, located in the South Oklahoma City area, is comprised of orthopedic surgeons. The two SOS physicians participating in the settlement are Anthony L. Cruse, D.O. and R.J. Langerman, Jr., D.O.
The parties will pay $72.3 million to settle allegations under the False Claims Act and the Oklahoma Medicaid False Claims Act. The claims alleged improper relationships between OCOM and SOS. The government claims that these improper relationships resulted in the submission of false claims to the Medicare, Medicaid, and TRICARE programs.
It is illegal to pay or receive “kickbacks” in conjunction with federal health care insurance. Under the False Claims Act, there can be an actionable claim where a provider submits a claim for government payment and that claim is tainted by a kickback violation.
The settlement resolves allegations initially brought in a 2016 whistleblower lawsuit by the United States, the State of Oklahoma, and the whistleblower. The False Claims Act allows an individual to sue on behalf of the United States and share in the recovery. It is unclear at this time what amount the whistleblower will receive in this matter.
The lawsuit claimed that from 2006 to 2018, OCOM and USP illegally provided “improper remuneration” to SOS and some SOS physicians in exchange for patient referrals. “Improper remuneration” allegedly included: office space, employees, and supplies at or below fair market value, excessive compensation for SOS services, excessive equity buyback provisions and payments for SOS physicians, and preferential investment opportunities relating to OCOM anesthesia services.
The DOJ reported that as a result of this settlement, USP will pay $60.86 million to the United States, $5 million to the State of Oklahoma, and $206,000 to the State of Texas. SOS, Dr. Cruse, and Dr. Langerman will pay $5.7 million to the United States and $495,619 to the State of Oklahoma.
In conjunction with the settlement, OCOM and SOS have each agreed to enter into five year corporate integrity agreements with the U.S. Department of Health and Human Services–Office of Inspector General. Per the agreements, OCOM and SOS will maintain compliance programs and their key executives will obtain compliance-related certifications.
