Doctors Care, SC medical groups to pay $22.5 million in alleged medical fraud case

The Columbia-headquartered Doctors Care and two affiliated South Carolina medical groups have agreed to pay $22.5 million to settle a civil medical fraud case brought by two whistleblowers in federal court.

The whistleblowers will receive a $5.4 million reward for bringing the matter to the government’s attention, according to a settlement announced Thursday by the U.S. Department of Justice. The two had detailed knowledge of the alleged fraud and helped the government, a complaint in the case said.

The U.S. Attorney’s office in Columbia, helped by federal investigators with federal health care agencies, has worked on the case since 2017.

Evidence in the case included emails and paperwork detailing how the alleged scheme worked, the U.S. Attorney’s Office said Thursday in a news release.

Under the settlement, Doctors Care — South Carolina’s largest urgent care provider network with some 50 offices around the state — admits no fault.

For many, the company’s doctors-staffed medical urgent care offices are an alternative to going to a hospital emergency room.

According to a complaint in the case, the defendants for several years filed numerous false claims with the government asking for payments for their patients who used federal health insurance such as Medicare, Medicaid, or Tricare — the military government health insurance program.

“Defendants falsely represented or certified to the Federal Healthcare Programs that all of the Defendants’ claims for payment were true, when they were not,” said a complaint in the case.

The claims were false in this sense — the doctors treating the patients had not been fully vetted by means of a rigorous certification process required of doctors by the federal government for its health insurance programs. Thus, when the company filed claims, other Doctors Care doctors — who had actually gone through the difficult vetting process — signed the paperwork as if they had actually treated the patient, the complaint said.

This approval is known as a provider’s “billing credentials.”

“The enrollment and credentialing process can often be costly in terms of time, resources, and administrative overhead,” the lawsuit said. “(But it) is designed to protect Medicare beneficiaries from receiving care or services from unqualified providers, protect Medicare beneficiaries from providers whose licenses are limited or restricted, and protect Medicare beneficiaries from providers who are excluded from the Medicare program and other Federal Healthcare Programs.”

The investigation focused on the lack of proper certification, and no evidence was found that any patient’s care was compromised or that any Doctors Care provider lacked a medical license due to the false documentation, according to the release.

The alleged fraud started in 2013 and continued into 2018, as UCI was unable to secure and maintain necessary billing credentials for most Doctors Care providers, according to the U.S. Attorney’s Office.

“UCI knew that federal insurance programs would deny claims submitted with the billing number of a provider who had not yet received their billing credentials,” the release said. “But instead of solving its credentialing problem — or holding claims while a temporary solution could be found — UCI allegedly submitted the claims falsely, ‘linking’ the uncredentialed rendering providers to credentialed billing providers in order to get the claims paid.”

With each “linked” bill, it is alleged that UCI knowingly submitted a false claim for payment, the U.S. Attorney’s Office said.

As an example of the alleged frauds, the complaint said that on March 29, 2017, “John Doe 5” was treated by a physician’s assistant at the Doctors Care in Forest Acres. The only doctor at the office was not certified as credentialed by Medicare or Medicaid. Despite this, another doctor — who was credentialed — signed a claim for payment certifying she was John Doe 5’s doctor, when she was not. Medicare and Medicare then paid $102.20 to Doctors Care.

Frauds were perpetrated in Doctors Care offices across South Carolina, in Greenwood, Little River, Orangeburg, Conway, Indian Land, the Grand Strand, Bluffton and Ridgeview, among others, the complaint said.

“Taxpayers and Medicare patients rightly expect medical providers to be properly credentialed before billing for their services,” said Derrick Jackson, special agent in charge of the Office of Inspector General for the U.S. Department of Health and Human Services. “Working with our law enforcement partners, we will continue protecting Federal healthcare programs.”

The complaint was brought under the federal False Claims Act, which allows for whistleblowers — usually insiders who work for a firm that receives government money — to file a lawsuit under seal while the government investigates the allegations. As an incentive for whistleblowers to come forward, the government will pay a bounty ranging from 15 to 25 percent of the total amount recovered at trial or in settlement.

In this case, the whistleblowers will get 24% for the allegations they brought to the government’s attention.

The $5.4 million reward to be shared equally by the two whistleblowers comes out of the $22.5 million settlement amount. The settlement also provides an additional $2.1 million in fees and expenses for the whistleblowers’ lawyers.

The four Columbia attorneys representing the whistleblowers are Bert Louthian, Bill Nettles, Fran Trapp and John Simmons, all from Columbia. Nettles and Simmons are former U.S. attorneys for South Carolina.

Assistant U.S. Attorneys in Columbia handling the case are Brook Andrews and Nancy Cote.

“It’s an honor to be in a position to represent brave whistleblowers like our clients and to work with Brook Andrews and other outstanding lawyers at the U.S. Attorney’s Office,” Louthian said. “It’s a privilege to have been able to take part in recovering this money for the taxpayers of America.”

Participating in the government investigation were the U.S. Department of Health and Human Services Office of Inspector General and the Department of Defense health service.

“When health care companies do business with the federal government, they must follow the rules like everyone else,” acting U.S. Attorney for South Carolina Rhett DeHart said in the release. “All companies with this distinction — regardless of size — should honor their commitment to provide competent care to the full letter of the law.”

In addition to Doctors Care, the other two defendants in the case were its affiliated companies, UCI Medical Affiliates Inc. (a related holding company), and UCI.

Doctors Care and UCI also entered into a corporate integrity agreement in which they agreed to submit to independent reviews of their practices for the next five years.

“This case should serve as a stark warning to those who attempt to exploit Department of Defense resources for personal gain,” Christopher Dillard, the special agent in charge of the DCIS Mid-Atlantic field office said in the release.

This story was originally published April 8, 2021 at 8:20 AM with the headline "Doctors Care, SC medical groups to pay $22.5 million in alleged medical fraud case."