Lessons learned from whistleblower FCA case against cancer treatment company

Whistleblower lawsuitEarlier this month, the U.S. Department of Justice announced that 21st Century Oncology and its wholly owned subsidiary, South Florida Radiation Oncology LLC, agreed to settle False Claims Act allegations relating to billing for procedures that were medically unnecessary. Specifically, the Fort Myers, Florida-based company was alleged to have billed for performing the Gamma function – a medical procedure designed to measure the exit dose of radiation from a patient after receiving radiation treatment.

The government alleged that the procedure served no medically appropriate purpose; that they were conducted by those who were not trained to interpret and use the results; that in some instances the results were not even reviewed until a week or more after the last day of a patient’s treatment; and, in other cases, they billed for the procedure even if the results were not available due to imaging equipment failures.

This lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Joseph Ting, a former physicist at South Florida Radiation Oncology. Under the whistleblower provisions, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery.

For its part, 21st Century Oncology agreed to pay $34.7 million. Ting will receive more than $7 million of the recovery.

Federal payers such as Medicare, Medicaid and TRICARE define “medically necessary” as “healthcare services or supplies needed to prevent, diagnose, or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.”

Here are some takeaways from this case:

Although healthcare providers are permitted to bill for new technologies, they must be proven to be useful and those utilizing such technologies must be properly trained. In this instance, the government alleged that 21st Century performed tests that were not only medically unnecessary, but that no one had been trained to properly interpret the results.

Whistleblowers such as Ting also have a lot at stake in these cases. They have a significantly better chance of winning a case if the government decides to intervene. The government may not intervene in the case where the liability is clear, but the potential damages to be recovered don’t justify government resources. In many cases, the government will let the relator’s counsel prosecute the case. Then, if sufficient damages are developed, the government may decide to intervene. That’s why it’s always best to discuss your case with a qualified healthcare fraud attorney. In addition, although the False Claims Act includes an anti-retaliation provision, retaliation can and does take place, so it’s imperative that you have a solid case.

False Claims Act cases will only continue to grow. Since January 2009, the Justice Department has recovered more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that recovered in cases involving fraud against federal health care programs.

In 2014, there were 804 new False Claims Act lawsuits filed, 713 of which were started by whistleblowers. The largest number of new FCA cases were in the area of healthcare, according to the latest statistics from the U.S. Department of Justice.

The Health Law Offices of Anthony C. Vitale is known for its representation of whistleblowers, as well as our ability to defend those who are the target of a whistleblower action. Our proactive approach in defending our clients helps to reduce the risks early on in an effort to find a successful resolution, even before litigation begins, saving our clients’ time and money.

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It is not intended as professional advice and should not be construed as such.