Jacksonville-based firm agrees to $22.5M Medicare settlement

Healogics was sued over allegations of billing for medically unnecessary therapy

By Garrett Pelican - Digital executive producer

JACKSONVILLE, Fla. - A Jacksonville-based company that operates nearly 700 wound care clinics across the country has agreed to pay as much as $22.5 million to head off federal whistleblower lawsuits over allegations the company violated the False Claims Act.

The settlement puts to rest allegations that Healogics knowingly billed Medicare for “medically unnecessary or unreasonable” hyperbaric oxygen therapy provided to patients from 2010 through 2015, according to the U.S. Attorney’s Office.

"Medicare beneficiaries are entitled to care based on their clinical needs and not the financial goals of healthcare providers," Acting Assistant Attorney General Chad Readler. "All providers of taxpayer-funded federal healthcare services… will be held accountable when their actions knowingly cause false claims for medically unnecessary services to be submitted."

The settlement calls for Healogics to pay $17.5 million, plus an additional payment of $5.01 million if certain criteria are met over the next five years, resulting in a total payment that could potentially reach up to $22.51 million.

In addition to the payment, Healogics agreed to sign a five-year corporate integrity agreement with the Department of Health and Human Services, which will add multiple layers of oversight into Medicare claims submitted by the company.

The allegations stem from separate whistleblower lawsuits filed by James Wilcox, the company’s former director of research and quality for medical affairs, and Dr. Benjamin Van Raalte, Dr. Michael Cascio, and John Murtaugh, two physicians and a program director who worked at affiliated clinics.

The settlement is the product of a collaboration by the Justice Department's Civil Division, the U.S. Attorney's Office for Florida's Middle District and the Department of Health and Human Services Office of Inspector General.

“Civil healthcare fraud enforcement has always been a core part of the mission of our office,” said U.S. Attorney Maria Chapa Lopez. “With this settlement, our Civil Division confirms its commitment to our nation’s critical struggle against practices that put public health programs at risk.”

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