Sioux City-Based Physician Group, Tri-State Specialists, L.L.P., Agrees to Pay Over $600,000 to Resolve False Claims Act Allegations

Tri-State Specialists, L.L.P. (Tri-State), has agreed to pay $612,501.44 to the United States, the State of Iowa, and the State of South Dakota to resolve allegations that it violated the False Claims Act by billing Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefits Program for medically unnecessary procedures and for procedures in excess of those actually performed.

The government alleged that, from August 2014 until August 2019, Tri-State submitted false claims for payment to government healthcare programs for surgical procedures and office visits performed by a plastic surgeon who previously was a partner with Tri-State. The government contended that claims submitted during this period violated the False Claims Act in three ways. First, the government alleged that the surgeon performed cosmetic procedures not reimbursable by government healthcare programs, including panniculectomies and abdominoplasties (also known as tummy tucks) and cosmetic breast reductions, that were falsely billed as medically necessary procedures. Second, the government alleged that the surgeon did not perform services sufficient to justify billing for high-value muscle flap and adjacent tissue transfer surgical procedures. Third, the government alleged that the surgeon did not perform services sufficient to bill for high-value office visits that require a comprehensive exam, comprehensive history, and detailed supporting documentation for patients that require moderately or highly complex medical decision making.

The United States alleged that Tri-State was liable for the surgeon’s acts both because the surgeon was an agent of Tri-State and because Tri-State knew of the surgeon’s acts. 

“False Claims Act investigations and enforcement are critical in protecting the government healthcare programs upon which millions of Americans depend. We will continue to vigorously investigate allegations of over-billing and medically unnecessary services in this district,” said United States Attorney Sean Berry.

“We work tirelessly alongside our law enforcement partners to investigate allegations of false billing and to ensure the appropriate use of U.S. taxpayer dollars,” said Curt L. Muller, Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General. “Excessive claims to Federal healthcare programs compromise the efficiency of these programs and deprive these programs of critical resources.”  

“As the investigative arm of the Department of Defense’s Office of Inspector General (DoD IG), one of the primary missions of the Defense Criminal Investigative Service (DCIS) is to safeguard valuable taxpayer dollars that fund programs such as Tricare, the military’s health care system,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “Today’s settlement is a testament to the resolve of our agents and our partners in investigating allegations of false claims and protecting taxpayer dollars.”

“The integrity of the Federal healthcare programs is threatened when providers submit false claims,” said Amy K. Parker, Special Agent in Charge with the Office of Personnel Management, Office of the Inspector General (OPM OIG). “The OPM OIG is committed to working closely with our law enforcement partners in order to investigate allegations of fraud in order to protect taxpayer funds.”

This civil matter arose from an action brought under the whistleblower provisions of the False Claims Act. Pursuant to that Act and the settlement agreement, the whistleblower will share in the United States’ financial recovery.

The claims asserted against Tri-State are allegations only; there was no determination or admission of liability.

The case was handled by Assistant United States Attorneys Melissa A.

Carrington and Matthew K. Gillespie and the State of Iowa Attorney General’s Office and investigated by the United States Department of Health and Human Services, Office of Inspector General; the United States Department of Defense Office of Inspector General, Defense Criminal Investigative Service; the United States Office of Personnel Management, Office of the Inspector General; and the State of Iowa’s Medicaid Fraud Control Unit. 

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