TAMPA, FLORIDA, April 12, 2022 – Physician Partners of America has agreed to pay a total of $24.5 million to the federal government and Florida to settle four whistleblower lawsuits, including one filed by Phillips & Cohen LLP, alleging its pain management clinics engaged in Medicare billing fraud and paid kickbacks to doctors for referrals.

The settlement agreement says that PPOA, which has more than two dozen clinics in Florida and Texas, fraudulently billed Medicare and other government healthcare programs for medically unnecessary urine drug tests, genetic testing and psychological testing from October 2015 to November 2021. The clinics are primarily in the Ft. Worth-Dallas area in Texas and around Tampa and Jacksonville in Florida.

The settlement agreement also covers the government’s allegation that PPOA violated the False Claims Act by falsely certifying that it was not engaged in “illegal activity” when it applied for and received a loan from the Paycheck Protection Program.

Phillips & Cohen filed the first “qui tam” (whistleblower) lawsuit against PPOA, which was in 2018 in federal district court in Tampa, Florida, where PPOA is based. PPOA practice groups Florida Pain Relief Group PLLC and Texas Pain Relief Group PLLC as well as PPOA founder, Dr. Rodolfo Gari, also were named as defendants.

Phillips & Cohen partnered with co-counsel Jillian Estes of Morgan Verkamp LLC on the case.

The “relator,” or whistleblower, was Donald Haight, a healthcare consultant who had a short-term contract with PPOA. The other three whistleblower lawsuits were filed in 2019 and 2020.

Haight’s qui tam complaint alleged that PPOA required its staff to order the most expensive urine drug tests for every patient, no matter if those tests were medically necessary or not, and greatly benefited financially from doing so because it sent those tests to the two clinical labs it owned.

Urine drug screens can be done at three levels: a simple dip-stick analysis to detect whether any illegal drugs are present, which can be done at a doctor’s office; a more qualitative analysis to assess the presence of specified drugs; and a highly complex analysis to determine the specific amounts of each drug present in the urine. The latter two must be done at a toxicology lab. The urine test to determine the specific amount of drugs is the most expensive and was the one that PPOA ordered for every patient.

Haight’s complaint also alleged that PPOA violated the Stark Law and Anti-Kickback Statute by paying financial incentives to physicians employed by or affiliated with its pain clinics for each urine test attributable to them. Doctors were awarded a percentage of the net revenue PPOA earned from urine drug test orders.

The Stark Law prohibits healthcare entities from submitting Medicare claims based on referrals for certain health services by doctors who have a financial interest in those services.

“PPOA allegedly required medical assistants to order expensive urine drug tests for all patients, without determining whether those test were medically necessary and without physician review of those orders,” said Colette Matzzie, a whistleblower attorney and partner at Phillips & Cohen. “Doctors were incentivized to go along with this scheme because they allegedly were paid for each order that had their names on them.”

Out of the total $24.5 million settlement, PPOA will pay the federal government nearly $24.5 million and the state of Florida $8,000.

Haight passed away last year, but his widow continued to pursue the case in his stead.

“Don Haight felt strongly that PPOA’s billing practices were wrong and knew that filing a qui tam lawsuit was the best way to get the government to investigate,” said Emily Stabile, a whistleblower attorney at Phillips & Cohen. “We are sad that he is not with us to see this positive outcome.”

Haight’s attorneys thanked Assistant US Attorney Lindsay Griffin and Department of Justice Trial Attorney David Tyler for their work on the case.

“DOJ has made false claims by pain management clinics a top enforcement priority in the healthcare industry,” said Stabile. “It has pursued a number of fraud cases against them in the past several years, alleging unnecessary medical services, illegal kickbacks and other issues.”

Most recently, DOJ settled for $7.4 million a billing fraud case brought by Phillips & Cohen on behalf of a whistleblower against a group of pain management clinics and surgery centers in New Jersey and New York City and their physician owner.

The False Claims Act empowers whistleblowers to sue individuals and entities that are defrauding the federal government and recover funds on the government’s behalf. The law offers whistleblowers protection against job retaliation and rewards ranging from 15% to 25% of the amount recovered, when the government joins the qui tam case. In this case, the whistleblowers will share an award of 19% of the recovery. Learn more about qui tam cases.

Haight’s whistleblower complaint: United States ex rel. Haight v. Physician Partners of America, LLC, Case No. 8:18-cv-267-T-24-AEP (M.D. Fla.)

Read the PPOA settlement agreement.

DOJ press release is posted here.

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