An urgent care group in South Carolina agreed to pay $22.5 million to settle False Claims Act (FCA) allegations concerning credentialing issues. The case is a cautionary tale for healthcare providers that failing to maintain accurate record-keeping systems for credentialing or other administrative matters could open them up to legal risks.
United States ex. rel. Dove v. UCI Medical Affiliates, Inc., et. al
The Department of Justice announced last month’s settlement with Doctors Care, P.A., South Carolina’s largest urgent care provider network, and its management company, UCI Medical Affiliates of South Carolina, Inc., after a three-year investigation into the provider’s billing credentials practices. The settlement resolves allegations that the provider submitted fraudulent claims to federal health insurers Medicaid, Medicare, and TRICARE.
Like many FCA lawsuits, this case was originally filed by whistleblowers under the FCA’s qui tam provision, which allows third parties, called relators, to bring a case on behalf of the government and share in any reward that is recovered. The two relators, former employees, claimed that Doctors Care and its management company, along with a related holding company (UCI Medical Affiliates Inc.), falsely certified that certain providers were approved to bill to Medicaid, Medicare, and TRICARE for medical services.
The federal healthcare programs require that physicians, physician assistants, nurse practitioners, and other providers receive credentials in order for their services to be billed. Providers must periodically renew their billing credentials and obtain new credentials if they switch employers.
According to the Department of Justice, the urgent care provider allegedly submitted claims for payment indicating that certain reimbursable services were provided by credentialed clinicians when in fact the services were provided by professionals who lacked the required billing credentials to submit claims to the federal programs.
From 2013 into 2018, the urgent care group was allegedly unable to secure and maintain the necessary billing credentials for many of its providers. The company knew that federal insurers would deny claims submitted with the billing number of providers who had not yet received their billing credentials. Rather than compliantly solving their credentialing problem, the company allegedly submitted the claims falsely by linking the uncredentialed providers to credentialed billing providers.
According to the government, the company used “cheat sheets” to keep track of the credentialed providers who could be substituted on uncredentialed providers’ bills. Evidence submitted included emails with details about the scheme as well as the cheat sheets.
Unlike many FCA cases, this one did not involve allegations that the providers billed the government for unreasonable amounts or medically unnecessary services. Nor was there any evidence that the providers in question lacked a medical license or that patient care was negatively impacted. Furthermore, when Doctors Care and UCI received their investigative subpoena in early 2018, the provider’s response was to immediately investigate and stop the improper conduct.
However, the alleged scheme was systematic to the organization, lasted for several years, and involved willful intent to defraud, according to the government.
“When healthcare companies do business with the federal government, they must follow the rules like everyone else,” Acting U.S. Attorney for the District of South Carolina M. Rhett DeHart said in a statement announcing the settlement. “Our office will continue to protect tax dollars and ensure the rule of law is followed.”
In addition to the $22.5 million settlement, the provider has entered into a Corporate Integrity Agreement with the Office of the Inspector General, in which Doctors Care and UCI must retain an Independent Review Organization to perform a claims review in accordance with specified requirements for the next five years.
While FCA cases focused solely on credentialing or other administrative errors are uncommon, it is possible for healthcare providers to run afoul of the law by failing to institute and maintain compliant credentialing and other record-keeping systems. To limit their exposure, healthcare companies must have sound management systems in place to ensure their providers’ credentials are up to date and that the claims submitted to government payers are accurate.