Bluestone Physician Services of Florida LLC, Bluestone Physician Services, P.A., and Bluestone National LLC, operating in Florida, Minnesota, and Wisconsin respectively, have agreed to pay $14.9 million to resolve allegations that they knowingly submitted claims for certain Evaluation and Management (E&M) codes for services related to the management of chronic care patients in assisted living and other care facilities that were not provided in conformity with applicable Medicare, Medicaid, and TRICARE requirements.
“Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue health care providers that defraud the taxpayers by knowingly submitting inflated claims.”
The settlement resolves allegations that from January 1, 2015, through December 31, 2019, Bluestone knowingly submitted claims for two E&M codes—the domiciliary rest home visit code for established patients (99337) and the chronic care management code (99490)—that did not support the level of service provided. The federal government’s share of the settlement is $13.8 million while $1.06 million will be paid to the States of Florida and Minnesota.
“Fraudulent billing undermines the integrity of government healthcare programs and diminishes legitimate services and resources for Minnesotans,” said U.S. Attorney Andrew M. Luger for the District of Minnesota. “Healthcare companies that institute a practice of upcoding and unnecessary billing will be held accountable for their misconduct.”
“The submission of false claims to Medicare for chronic care services will not be tolerated in the Middle District of Florida,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “This resolution sends a message to the provider community and to our district that we will actively investigate and prosecute this kind of conduct whenever it appears.”
“When health care providers submit false claims to taxpayer-funded federal health care programs, including inappropriately inflating claims to boost profits, the public’s trust in our nation’s medical providers and the integrity of federal health care programs are put at risk," said Special Agent in Charge Mario M. Pinto of the Department of Health and Human Services, Office of Inspector General (HHS-OIG) Chicago Regional Office. “We will continue to work together with our law enforcement partners to ensure that those who engage in conduct as alleged in this case are held accountable. Furthermore, the OIG’s five-year compliance agreement is designed to ensure that the alleged behavior will not be repeated.”
In connection with the settlement, Bluestone has entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG which requires Bluestone to establish and maintain a compliance program meeting certain requirements and submit to an Independent Review Organization’s review of Bluestone’s Medicare claims.
The civil settlement includes resolving claims brought under qui tam or whistleblower provisions by Lisa Loscalzo, former General Manager for Bluestone’s Florida market. Under these provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Loscalzo v. Bluestone Physician Services et al., 20-cv-295-FtM-38NPM (M.D. Fla). Ms. Loscalzo will receive $2.83 million from this settlement.
The resolution was achieved through coordination between multiple entities including the Justice Department’s Civil Division's Commercial Litigation Branch Fraud Section; U.S Attorneys’ Offices for Minnesota and Florida; HHS-OIG; Defense Criminal Investigative Service; and FBI.
This investigation underscores efforts against healthcare fraud using tools like the False Claims Act. Tips about potential fraud can be reported to HHS at 800-HHS-TIPS (800-447-8477).
Trial Attorneys Erin Colleran and Joanna Persio from Civil Division's Fraud Section along with Assistant U.S Attorneys Kristen E Rau, Emily Peterson (Minnesota), Kelley Howard-Allen (Florida) handled this matter.
The claims resolved by this settlement are allegations only without determination of liability.
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