U.S. Settles Lawsuit Alleging Medical Staffing And Services Companies Defrauded Medicare By Submitting Claims Under The Names Of Doctors Who Did Not Perform The Services

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the United States has filed and settled a civil fraud lawsuit against ADVANCED HEALTH PARTNERS, INC., f/k/a “Medicom Management Services, Inc.”; MEDEXCEL USA, INC.; MEDEXCEL EMERGENCY PHYSICIAN SERVICES OF YONKERS, PLLC (“MEPSY”); and TRI-STATE EMERGENCY PHYSICIANS, PLLC (collectively the “Defendants”).  This settlement resolves a lawsuit under the False Claims Act alleging that the Defendants submitted or caused the submission of false claims to Medicare using the names and identifying information of physicians who did not perform or supervise the medical services claimed and, in many cases, were no longer employed by the Defendants.

Under the terms of the settlement approved today by U.S. District Judge Nelson S. Román, the Defendants admitted and accepted responsibility for their conduct and agreed to pay $475,000 in damages to the United States.

U.S. Attorney Damian Williams said: “Advanced Health Partners, working with Medexcel, fraudulently billed Medicare on behalf of MEPSY and Tri-State at significant cost to taxpayers.  This settlement holds these entities accountable both through the monetary payment and the detailed admissions they have made.” 

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Providers that conceal or fail to submit accurate billing information can affect individuals who depend on Medicare funding for access to safe and effective health care services.  The laws are meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.  Our agency collaborates frequently with our law enforcement partners to investigate providers alleged to undermine our federal health care programs by submitting fraudulent claims, thus violating the False Claims Act.”

As part of the settlement, the Defendants admit, acknowledge, and accept responsibility for the following conduct:

• Between 2007 and 2017 (the “Covered Period”), MEPSY and TRI-STATE provided clinical staff to operate emergency departments at various hospitals in or around the Southern District of New York (the “Emergency Departments”).
• During the Covered Period, ADVANCED HEALTH PARTNERS submitted claims to the Medicare program (the “Subject Claims”) for professional services rendered at the Emergency Departments by physicians or other clinical staff employed by MEPSY and TRI-STATE.
• MEDEXCEL provided management services to MEPSY and TRI-STATE.  Additionally, MEDEXCEL provided back-office support and guidance to ADVANCED HEALTH PARTNERS concerning its billing practices, including, in some instances, by directing which physician’s National Provider Identification number (“NPI”) to use to bill for specific services.
• During the Covered Period, several thousand of the Subject Claims used the NPIs of physicians who did not render or supervise the services in question, rather than the NPIs of the physicians who had actually rendered or supervised the services.  Specifically, ADVANCED HEALTH PARTNERS, who received billing guidance from MEDEXCEL, used the NPIs of physicians who previously had been, but were no longer, employed by MEPSY or TRI-STATE.
• Defendants MEPSY and TRI-STATE received substantial reimbursement from Medicare to which they were not entitled as a result of these claims, and ADVANCED HEALTH PARTNERS and MEDEXCEL caused Medicare to make these unwarranted payments.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act. 

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Mr. Williams thanked HHS-OIG for its assistance. 

The case is being handled by the Office’s Civil Division.  Assistant U.S. Attorneys Peter M. Aronoff and Jacob M. Bergman are in charge of the case.