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Radiation oncology providers to settle whistle-blower suit for $3.5M

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Inter-related radiation oncology providers in Pensacola, Fla., will pay $3.5 million to the federal government and the state of Florida to settle charges in a whistle-blower suit that says they billed government programs, including Medicare, for radiation oncology services that were ineligible for payment.

Most of the defendants say they have always provided appropriate health care.

A whistle-blower will receive about $609,800 from the federal government's share of the settlement amount, according to the Department of Justice.

The defendants, which included Sacred Heart Health System Inc. and West Florida Medical Center Clinic P.A., were charged, between 2007 and 2011, with regularly billing for radiation oncology services that were not supervised by a physician as required by Medicare, Medicaid and TRICARE, which is the health care program for uniformed service members, retirees and their families, the DOJ said Friday.

The DOJ said, in fact, these services often were performed while the defendant doctors were on vacation or working at another radiation oncology clinic. The government also charged that the defendants billed for other treatment services even when patients' medical records provided no evidence the services were rendered.

They also allegedly billed twice for the same services and misrepresented the level of service provided to increase their reimbursement from the federal health care programs.

According to the DOJ, Sacred Heart and West Florida Medical Center have been the sole shareholders of defendants Gulf Regional Radiology Oncology MSO L.L.C. and Gulf Region Radiation Oncology Centers Inc. since December 2007.

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Sacred Heart was also a shareholder in Emerald Coast Radiation Oncology Center L.L.C. in Destin, Fla., which is about 60 miles from Pensacola. Also, beginning in December 2007, defendants Drs. Gerald Lowrey and Rod Krentel, who are both radiation oncologists, began providing physician services at Gulf Region Radiation clinics, and in June 2008, and began providing services at Emerald Coast Radiation.

In addition to the overall settlement, Gulf Region Radiation and Drs. Lowrey and Krentel entered into integrity agreements with the U.S. Department of Health and Human Services' Office of Inspector General that are intended to deter wrongful conduct in the future, and require enhanced accountability and monitoring activities to be conducted by internal and independent reviewers, the DOJ said in its statement.

The charges resolved by the settlement were first raised in a lawsuit filed against the defendants under the whistle-blower provisions of the False Claims Act. Whistle-blower Richard Koch, who previously worked at Gulf Region Radiation, will receive about $609,796 from the federal share of the settlement amount, said the DOJ.

According to the settlement, which was filed in federal district court in Pensacola, there has still not been a settlement agreement as to a retaliation claim by Mr. Koch, as well as his attorneys' fees and expenses, and these remain pending.

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Commenting on the settlement, Pamela C. Marsh, U.S. Attorney for the Northern District of Florida in Tallahassee said in a statement, “Submitting false claims for medical services raises the cost of health care for all of us as patients and taxpayers. Patients, employees and others who suspect billing fraud on the part of health care providers should not hesitate to report such fraud to federal authorities. Health care providers – both corporations and individuals – must be held accountable when they submit false information.”

Defendants other than the physicians said in a joint statement, “The settlement is not an admission of liability by (Gulf Regional Radiation), its owners, or the radiation oncologists.

“We have disputed the lawsuit for the past 17 months and we are pleased to settle the matter and avoid further protracted litigation and substantial legal costs.”

The statement said, “The defendants have consistently maintained that all of the care provided by the physicians and facilities was always safe, medically necessary and appropriate.

“It is important to note that the lawsuit had nothing to do with the health care provided by Sacred Heart Hospital, Medical Center Clinic or the physicians of Sacred Heart Medical Oncology Group. The allegations involved the (Gulf Regional Radiation) facilities which are separate and jointly owned by Sacred Heart Health System and Medical Center Clinic.”

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The attorney for Dr. Lowrey, Brian E. Dickerson, a partner with law firm Roetzel & Andress P.A. in Washington, said: “The larger companies in this case felt it was more economical to settle this case than to fight it. There's no question of wrongdoing. The question at hand has nothing to do with standards of care and the quality of care provided to patients.

“The issue is what (has been deemed) necessary to bill vs. what many of the medical professional associations deem necessary to review, and this ambiguity is causing this type of litigation and False Claim Act cases across the country,” Mr. Dickerson said.

The attorney for Dr. Krentel could not immediately be reached for comment.