University of Rochester to Pay More Than $100,000 to Resolve False Claims Act Lawsuit

SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian and New York State Attorney General Eric. T. Schneiderman announced today that the University of Rochester (UR), which among other things operates a teaching hospital based in Rochester, New York, will pay $113,722.10 to resolve allegations that it violated the federal and New York False Claims Acts by improperly using a billing modifier on certain healthcare claims at UR’s Flaum Eye Institute, resulting in UR receiving payments to which it was not entitled.

A provider’s use of a modifier on a healthcare claim can allow the provider to receive compensation when it would otherwise be unavailable under applicable regulations. Here, modifier 25 may be added to certain healthcare claims where the provider renders a significant, separately identifiable evaluation and management service to the same patient on the same day as another procedure or other service. Modifier 25 should be used only when the evaluation and management service is above and beyond the usual pre-and-post operative work of a procedure and the need for the additional service is supported by the medical record. By using modifier 25 when the foregoing conditions were not present, UR received higher compensation than it should have received for certain ophthalmology services claims it submitted to government payers. For example, in certain instances UR performed and billed for ophthalmology procedures known as intravitreal injections (i.e. injections into the eye) and then billed modifier 25 for additional evaluation and management services to the same patients, although the medical records lacked sufficient documentation to support billing for care beyond the injection procedure itself.

This investigation was triggered by a whistleblower lawsuit filed under the qui tam provisions of the federal and New York False Claims Acts, which allow private persons, knowns as “relators,” to file civil actions on behalf of the government and share in any recovery. The relator in this case will receive $19,332.76 of the settlement proceeds. This case is docketed with the United States District Court for the Northern District of New York under number 5:15-cv-266 (MAD/TWD).

UR disclosed its improper use of modifier 25 to the government before becoming aware of the lawsuit.

“Today’s settlement reflects my office’s commitment to using the False Claims Act to protect the public fisc and to vigorously investigative cases brought to our attention by whistleblowers,” said U.S. Attorney Richard S. Hartunian. “It also reflects UR’s self-disclosure of the conduct at issue to the government, a practice that this Office commends, before UR had knowledge that a relator had filed a qui tam complaint.”

“When an organization catches an error in their Medicaid billing and self-reports, it prevents hardworking New York taxpayers from having to absorb the cost,” said New York Attorney General Eric T. Schneiderman. “I commend UR for their willingness to come forward, and for their cooperation throughout this matter. Reimbursing Medicaid for false claims is vital to the integrity of the program, and we will continue working to ensure that all providers repay what is owed.”

“This settlement is another example of our commitment to holding health care providers accountable for their billing practices,” said Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations. “HHS-OIG will continue to protect the federal health care programs intended for our most vulnerable Americans.”

This investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of New York, the New York State Attorney General’s Office, and U.S. Department of Health and Human Services Office of the Inspector General. The United States was represented by Assistant United States Attorney Michael D. Gadarian and New York State was represented by Special Assistant Attorney General Paul R. Berry.