Clinics to Settle False Medicare Claims for $1.8M; Whistleblower to Get $324K

Two orthopedic clinics, Tennessee Orthopaedic Clinics P.C. and Appalachian Orthopaedic Clinics P.C., will pay a combined $1.85 million to resolve allegations under the False Claims Act that they knowingly billed state and federal health care programs for re-imported osteoarthritis medications, known as viscosupplements, the Department of Justice announced last week. 

Viscosupplements are injections approved by the Food and Drug Administration for the treatment of osteoarthritis pain in the knee. Viscosupplements are reimbursed by Medicare, Medicaid and other federal health care programs at a set rate based on the average sales price of the domestic product. The government alleged that the clinics knowingly purchased deeply discounted viscosupplements that were re-imported from foreign countries and billed them to state and federal health care programs at the set rate in order to profit from the reimbursement system, when such reimported viscosupplements were not reimbursable by those programs. Allegedly, the re-imported product included labeling in foreign languages and in English for additional uses not approved in the United States, demonstrating that the product was re-imported.  Moreover, because the product was re-imported, the government alleged there was no manufacturer assurance that it had not been tampered with or that it was stored appropriately. 

Tennessee Orthopaedic Clinics P.C. will pay $1.3 million, and Appalachian Orthopaedic Clinics P.C. will pay $550,000. 

The lawsuit was originally filed by Douglas Estey, a physician’s assistant paid to speak to medical providers about the use of viscosupplements, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Estey will receive $323,750 as his portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.