JAX Wound Care Company to Pay $22.51 Million to Settle Lawsuit Alleging Medicare Fraud

Today Morgan & Morgan’s whistleblower team announced that Healogics, a Jacksonville, Florida-based wound care company, has agreed to pay $22.51 million to settle two lawsuits alleging that the company and its partner hospitals overbilled the government for unnecessary hyperbaric oxygen (“HBO”) treatments provided to Medicare patients.

The original February 2014 complaint alleged that during their time with the company, contracted doctors Benjamin Van Raalte and Michael Cascio were instructed to order and perform medically unnecessary and unreasonable HBO treatments on Medicare patients, while Program Director John Murtaugh was pressured to make sure that the physicians in the wound center performed these unnecessary treatments.

Morgan & Morgan’s whistleblower team, led by attorney James Young and senior investigator David Reign, worked closely with the clients to gather evidence and build a clear cut case to expose the alleged fraudulent scheme.

“These courageous whistleblowers risked their careers and reputations in exposing this scheme,” Young said.  “Our clients are healthcare heroes who stepped forward and exposed a scheme that has not only allowed the government to recover over 22 million dollars, but also put a stop to the excessive and unnecessary use of the treatments.”

The three Relators filed the lawsuit under the whistleblower provisions of the False Claims Act, which allow private individuals to sue on behalf of the government over false and fraudulent claims, and allows them to share in the recovered funds. The law also allows the federal government to intervene in a lawsuit and assume the case, which it did in this instance.

“Providers should focus on clinical quality and not on how many revenue-producing procedures are performed,” said John Murtaugh, former Program Director of the Comprehensive Wound Care Center at Dr. P. Phillips Hospital in Orlando.  “When key performance indicators are based on healing rates, then financial success will follow.  When money comes first, the patient comes last.”

“Just as important, compliance departments should protect employees and ensure there is a channel to report concerns without retaliation,” Murtaugh added.

The settlement with the federal government resolves the lawsuit’s claims.

“I am happy with the result and glad to put this behind me. I feel vindicated because it’s a very lonely feeling to stand up for what you know is right and have almost everyone turn their backs and ignore you,” Cascio said.  “Coming forward and exposing this behavior was the most difficult thing I have endured in my career as a physician.”

“This case exposes the fundamental flaw in our healthcare reimbursement system — it relies on the trust and integrity of physicians to bill for necessary and appropriate services and no more,” Reign said. “The government cannot watch or audit every physician or sit in every hospital.  Unfortunately, so long as there are greedy people there will be money to be made like this.  The sad truth is billing for unnecessary services will never go away.”

The case is United States, et al. ex rel. Van Raalte v. Healogics, et al., Case No.14-cv-283.

Filing a Whistleblower Lawsuit: A Contingency-Fee Act of Justice

Those considering the filing of a whistleblower lawsuit aren’t in it just for the money, though. They take fraud seriously and recognize the damage it is doing: that it wastes taxpayers’ hard-earned dollars and wears away at the fabric of society. However, the compensation you can get from a case can be a great reward for a whistleblower’s contribution to society.

Contact us today for a free, confidential, no-risk case evaluation. Our team is ready to try to help you get justice. Morgan & Morgan pays for all expenses incurred in a whistleblower lawsuit, including travel and hiring expert witnesses, among other things.