Tennessee Orthopedic Clinics Settle Whistleblower Lawsuit for $1.85 Million

March 3, 2014 — Whistleblowers can have a great impact in the fight against Medicare and Medicaid fraud. The U.S. Justice Department (DOJ) depends in particular on health care industry insiders to spot false claims before they are noticed by federal investigators. The federal False Claims Act allows informants to file a qui tam claim in court for the government’s benefit. To encourage tipsters to come forward, the Act entitles them to a sizeable cut of the government’s recovery.

Orthopedic Clinics Allegedly Billed Medicare for Reimported Knee Products

Two orthopedic clinics headquartered in Tennessee have settled a False Claims Act lawsuit for a total of $1.85 million. The whistleblower suit alleged that the clinics billed federal and state healthcare programs for reimported viscosupplements, used to treat osteoarthritis of the knee. Tennessee Orthopaedic Clinics P.C. will pay $1.3 million and Appalachian Orthopaedic Clinics P.C. will pay $550,000 to resolve the claims.
Orthovisc and Synvisc are viscosupplements injected into the knee to treat pain from osteoarthritis. Federally funded healthcare programs, such as Medicare, will reimburse for Orthovisc and Synvisc at a level determined by the average domestic sales price of the products. According to the DOJ, the two Tennessee-based clinics bought viscosupplements at a huge discount in foreign countries, then reimported the products and billed federal health care programs at the higher domestic rate.
Reimported products are not reimbursable by Medicare or any other federally funded healthcare program. When products are reimported, there is no guarantee from the manufacturer that the products have not been altered, nor is there any way to know that they have been properly stored. Further, the reimported products in this case included labeling describing other uses for the products that are unapproved by the U.S. Food and Drug Administration.
The whistleblower in this case was Douglas Estey, a physician’s assistant retained by Genzyme Corp. to educate health care providers about the benefits of Synvisc. Mr. Estey’s share of the settlement is $323,750.

Reimported Health Care Products Endanger Patient Safety and Drive Up Cost of Medicare

Health care insiders at most medical clinics just want to help patients recover their good health. Before blowing the whistle, these conscientious workers deserve to understand their own rights under the False Claims Act. With qui tam lawyers in across the country, Waters & Kraus is committed to protecting your interests. When you’re thinking about collaborating with the government to end health care fraud, contact by email us or call our whistleblower lawyers at 855.784.0268.

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