Oncology parent company settles following subsidiary’s agreement in whistleblower case

by Ben Vernia | April 27th, 2016

On March 8, the Department of Justice announced that 21st Century Oncology, Inc., the parent of 21st Century Oncology, LLC (which paid nearly $20 million to DOJ in December 2015), and another subsidiary have agreed to pay $34.7 million to settle allegations, originally brought by a whistleblower, that the companies submitted claims for medically unnecessary services. According to DOJ’s press release:

21st Century Oncology Inc., the nation’s largest physician led integrated cancer care provider and its wholly owned subsidiary South Florida Radiation Oncology LLC, have agreed to settle allegations that they performed and billed for procedures that were not medically necessary, the Department of Justice announced today.  21st Century is headquartered in Fort Myers, Florida, and has offices in 16 states.

The settlement relates to defendants use of a medical procedure – called the Gamma function – to measure the exit dose of radiation from a patient after receiving radiation treatment.  The United States alleged that the defendants knowingly and improperly billed for this procedure under circumstances where the procedure served no medically appropriate purpose.  For example, the government alleged that the procedure was performed by physicians and physicists at 21st Century Oncology locations who were not properly trained to interpret and utilize the Gamma function results.  The government also alleged that the defendants billed for this procedure when no physician reviewed the Gamma function results until seven or more days after the last day patients received radiation treatment therapy.  Finally, the government alleged that the defendants billed for the procedure when no Gamma result was available due to technical failures in the imaging equipment.

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The government announced that the relator will receive over $7 million from this settlement (a relator’s share of approximately 20%).

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