Houston Doctor Settles Medicare Fraud Charges for $1.5M

The former president of a leading medical association agrees to resolve whistleblower allegations of False Claims Act violations and Medicare fraud.

HOUSTON — A lawsuit brought by a whistleblower nurse alleging 7.5 years of Medicare fraud committed by Houston doctor Dr. Gurunath Thota Reddy and his practice settled for $1,575,000, according to an announcement by the U.S. Department of Justice on Wednesday. The whistleblower is represented by Waters & Kraus, LLP. The complaints in the action were recently unsealed by Judge Alfred H. Bennett, over the objection of the defendants.

“We are proud of our client’s bravery and insistence on exposing these dangerous practices and false claims,” commented Charles Siegel, who represents the whistleblower and is a partner at Waters & Kraus. “She put her own livelihood at risk for the sake of her patients’ lives.”

Dr. Reddy, a former president of the Harris County Medical Society, is named in the whistleblower lawsuit, together with North Houston Endoscopy & Surgery L.P. (now Memorial Hermann Endoscopy and Surgery Center North Houston), Digestive & Liver Disease Consultants P.A., ASC Anesthesia Services, P.A., and United Surgical Partners International. Dr. Reddy is alleged to have an ownership interest in all entities but United Surgical Partners.

The whistleblower, an endoscopy nurse who was formerly employed by North Houston Endoscopy & Surgery, brought the initial whistleblower case. She claimed that Dr. Reddy and other physicians failed to take the necessary amount of time to fully complete colonoscopies, sometimes spending less than two minutes on a procedure, potentially missing life-threatening cancers. The endoscopy nurse also claimed that physicians did not follow proper sanitation guidelines, failing to regularly wash their hands or change into clean gowns before each procedure—a requirement the whistleblower claimed they avoided to save money.

While the settlement resolves the allegations of Medicare fraud, it does not determine liability and the parties have admitted no wrongdoing. The endoscopy nurse, however, is pleased with the outcome. Her attorneys say she is adamant about wanting to make sure the facts of the case see the light of day.

“It should be noted that Dr. Reddy—who is alleged to have made ‘quickie’ colonoscopies a habit and to have refused to follow the most basic rules of hygiene—also had a leadership role in  the campaign to limit doctors’ liability for injuries and deaths caused by malpractice in Texas,” said Peter Kraus, a founding partner of Waters & Kraus. “This is the kind of conduct that results when you weaken the ability of patients injured by reckless doctors to hold those doctors accountable,” Mr. Kraus explained.

The whistleblower is represented by Charles S. Siegel and Kay Gunderson Reeves of Waters & Kraus, LLP in Dallas, Texas and Robert Talaska of The Talaska Law Firm in Houston.

About Waters & Kraus

Waters & Kraus is a national plaintiffs’ firm with lawyers litigating complex civil matters as well as practicing qui tam whistleblower litigation and False Claims Act litigation nationwide. Based in Dallas, Texas, the firm has offices in Los Angeles, California and by appointment in Illinois. Our attorneys represent whistleblowers exposing fraud and false claims against the government in a variety of matters including government contractor fraud and procurement fraud, healthcare fraud, assisted living fraud, SEC fraud, and Foreign Corrupt Practices Act (FCPA) violations. Contact us at 800.226.9880 to learn more about our practice and our qui tam attorneys.

Waters Kraus Paul & Siegel is the West Coast practice Waters & Kraus, LLP, a national plaintiffs’ law firm.

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