NextCare, a nationwide urgent-care-center company based in Phoenix, has agreed to pay the feds $10 million for submitting false claims to Medicare, Medicaid and other federal health-care programs.
We had no idea turning in corrupt corporations could be so lucrative: The informant in this case, former NextCare employee Lorin Cohen, will be paid $1.6 million "for her share of the recovery," according to a U.S. Justice Department news release.
That's even better than a lottery jackpot, because Cohen knows her willingness to step up means the company may put a halt to its taxpayer-fleecing ways.
NextCare routinely billed federal health-care agencies for "unnecessary allergy, H1N1 virus and respiratory panel testing."
A call to the company's corporate office in Mesa was not returned.
Health-care providers are allowed to be reimbursed by federal programs only for medically necessary procedures.
We're not sure why Cohen got all the money, because a 2011 civil case against NextCare also alleging the company filed false claims was instigated by a Surprise man named Antonio Saidiani. A spokesman with the DOJ said he'd check on our question and get back tous.
In the 2011 lawsuit, Saidiani, who worked as a manager overseeing operations in eight Arizona NextCare urgent care centers, alleges that the company was tight on cash in 2008 and early 2009, so it embarked on a series of "testing initiatives" that lasted until at least April of 2010, when Saidiani left the company.
The initiatives instructed employees at NextCare facilities to conduct allergy tests on "all patients regardless of the condition that brought them in." Patients getting allergy tests would also receive a routine spirometry test that measures lung function. And if a patient exhibited cold or flu symptoms, they were always tested for H1N1 "swine flu," the lawsuit states.
Those medically unnecessary tests allegedly defrauded the government of tens of millions of dollars.
Staff members were told to recommend an allergy test for every man, woman and child to come into the clinic with the slightest sniffle, the lawsuit alleges. For those who agreed, the test involved pricking the skin with 62 different allergens and examining the body's response. Patients were notified that their insurance would pick up the tab for the test.
The lawsuit quotes from a 2009 e-mail sent to senior managers by former NextCare CEO John Shufeldt, who told employees the "dew is off the rose" as far as stockholders in the private company are concerned, and that revenue-enhancing, universal allergy tests could save the company.
"I cannot stress how important this program is [to] our financial well-being," Shufeldt wrote.
The CEO threatened that managers who failed to meet a monthly quota for the allergy tests would be fired, the lawsuit states.
NextCare replaced Shufeldt as CEO in June 2010 with Phoenix native John Julian.
From the sound of it, even with the $10 million penalty, NextCare still came out ahead on this one. Click here to read the NextCare lawsuit alleging false claims.
UPDATE: Charles Miller with the DOJ got back to us later, saying that Cohen had filed a similar lawsuit before Saidiani. The reward for whistleblowers is on a first-come, first-serve basis, Miller explains, so only Cohen gets the jackpot.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
Scroll down for statement by NextCare:
NextCare got back to us later with this prepared statement:
As outlined in the agreement, NextCare has defended any wrongdoing in their billing practices and has agreed to settle this investigation to avoid a costly and lengthy review process.
"This agreement allows us to focus on our priority of providing every person access to affordable healthcare without distraction. Our time and resources are best dedicated looking to the future and continuing to develop a more cost effective convenient healthcare delivery model. NextCare is proud of the high-quality, cost efficient care that our employees, providers and clinic staff provide in the communities we serve every day, " said John Julian, Chief Executive Officer of NextCare.