False Claims Counsel

On December 12, the Department of Justice announced that 21st Century Oncology, Inc., of Fort Meyers, Florida, had agreed to pay $26 million to resolve claims that the company submitted claims that were false because they were tainted with violations of the Stark Law.

21^st Century Oncology Inc. and certain of its subsidiaries and affiliates have agreed to pay $26 million to the government to resolve a self-disclosure relating to the submission of false attestations regarding the company’s use of electronic health records software and separate allegations that they violated the False Claims Act by submitting, or causing the submission of, claims for certain services provided pursuant to referrals from physicians with whom they had improper financial relationships.

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21^st Century Oncology, which is headquartered in Fort Myers, Florida, owns and operates subsidiaries and affiliates throughout the United States that provide integrated cancer care.  As part of its business, 21^st Century Oncology’s subsidiaries and affiliates employ physicians in specialty fields such as radiation oncology, medical oncology, and urology.

The settlement announced today resolves conduct that was self-disclosed by the company regarding payments made by the government as part of the Medicare Electronic Health Records (EHR) Incentive Program.  Under the Medicare EHR Incentive Program, physicians who attest to their meaningful use of certified EHR technology may receive incentive payments and avoid downward adjustments to certain Medicare claims.  As part of its self-disclosure, 21^st Century Oncology reported that it knowingly submitted, or caused the submission of, false attestations to CMS concerning employed physicians’ use of EHR software.  The company further reported that, in support of the attestations, its employees falsified data regarding the company’s use of EHR software, fabricated software utilization reports, and superimposed EHR vendor logos onto the reports to make them look legitimate.

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The settlement also resolves the government’s allegations regarding violations of the physician self-referral law (commonly referred to as the “Stark Law.”)  The Stark Law prohibits an entity from submitting claims to Medicare for designated health services performed pursuant to referrals from physicians with whom the entity has a financial relationship unless certain designated exceptions apply.  The government alleged that 21^st Century Oncology and certain of its subsidiaries and affiliates violated the FCA by submitting, or causing the submission of, claims for services performed pursuant to referrals from physicians whose compensation did not satisfy any exception to the Stark Law.

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The government announced that the company has also entered into a five-year corporate integrity agreement with HHS’s Office of Inspector General, and that the whistleblower, a former executive with the company, will receive $2 million (an 8% share).