Physician Partners Of America LLC (PPOA), along with its founder Rodolfo Gari, and former chief medical officer Dr. Abraham Rivera, has reached a settlement agreement of $24.5 million. This resolution addresses allegations of False Claims Act violations, specifically concerning billing federal healthcare programs for medically unnecessary services and unlawful financial arrangements with physician employees. The allegations also include a false statement related to a loan obtained through the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). Several PPOA affiliated entities, including Florida Pain Relief Group, Texas Pain Relief Group, Physician Partners of America CRNA Holdings LLC, Medical Tox Labs LLC, and Medical DNA Labs LLC, are also liable for the settlement amount.
The core of the allegations against Physician Partners of America revolves around the submission of claims for unnecessary urine drug testing (UDT). It was alleged that PPOA mandated its physician employees to order multiple UDTs concurrently, without proper assessment of medical necessity or review of initial test results. Specifically, the government contended that Physician Partners of America required presumptive UDT orders, and then billed federal healthcare programs for the highest-level definitive UDT, regardless of medical justification.
Furthermore, the United States government asserted that Physician Partners of America incentivized its physician employees to order presumptive UDT by providing them with 40% of the profits generated from these tests. This practice is a violation of the Stark Law, which prohibits physicians from referring patients for “designated health services” payable by Medicare or Medicaid to entities with whom they have a financial relationship, unless a specific exception applies. The Stark Law is designed to prevent conflicts of interest in healthcare referrals and ensure that medical decisions are based on patient needs, not financial gain.
In addition to the allegations related to urine drug testing, the government also claimed that Physician Partners of America had a practice of requiring patients to undergo genetic and psychological testing before they even consulted with a physician. These tests were allegedly conducted without proper determination of medical necessity, and subsequently, Physician Partners of America billed federal healthcare programs for these potentially unwarranted tests.
The allegations extended to actions taken by Physician Partners of America during the COVID-19 pandemic. When Florida suspended non-emergency medical procedures in March 2020, it is alleged that PPOA sought to offset revenue losses by instructing its physician employees to schedule unnecessary evaluation and management (E/M) appointments with patients every 14 days, a significant increase from their prior practice of monthly appointments. Furthermore, Physician Partners of America allegedly directed its physicians to bill these E/M visits using inappropriately high-level procedure codes, maximizing their reimbursement from federal healthcare programs.
Compounding these issues, the United States government further alleged that while engaging in this unlawful overbilling scheme, Physician Partners of America submitted a false representation to the SBA. In order to secure a $5.9 million loan through the PPP, PPOA allegedly falsely certified that it was not engaged in any unlawful activity. The recent settlement resolves liabilities under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), stemming from both the false claims submitted for E/M visits and the false statement made in connection with the PPP loan application by Physician Partners of America.
Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, emphasized the department’s commitment to combating healthcare fraud. “Billing federal healthcare programs for services that providers know are unnecessary or unreasonable undermines the quality of care that patients receive and increases the costs of these taxpayer-funded programs,” stated Boynton. He further asserted that the Department of Justice is dedicated to ensuring healthcare providers prioritize patient needs over their own financial interests in treatment decisions.
U.S. Attorney Roger B. Handberg for the Middle District of Florida echoed this sentiment, stating, “Holding healthcare providers accountable for inflated claims and false statements helps ensure the integrity of the healthcare system as a whole.” He highlighted the importance of settlements like this in moving towards that goal.
Peggy Delinois Hamilton, General Counsel for the SBA, emphasized the agency’s focus on swift and equitable relief distribution during the pandemic, while maintaining program integrity. Hamilton stated, “The SBA takes fraud seriously and will continue to make it our priority to work alongside the Office of the Inspector General to identify and address any potential fraud to ensure sound administration of relief programs.”
In conjunction with the financial settlement, Physician Partners of America has also entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). This CIA mandates significant compliance efforts from PPOA, including establishing a compliance department, appointing a medical director and oversight board, retaining a compliance expert, and providing management certifications. Furthermore, Physician Partners of America is required to maintain written standards, conduct regular training and education programs, undergo multiple annual claims reviews by an Independent Review Organization, establish a risk assessment and internal review process, and implement monitoring of testing referrals.
Special Agent in Charge Omar Pérez Aybar of HHS-OIG commented on the settlement, stating, “When health care providers bill taxpayer-funded health care programs for medically unnecessary services, they divert government funds designed to assist business owners during this pandemic.” He affirmed that their agency will continue to collaborate with law enforcement partners to thoroughly investigate healthcare fraud schemes.
Director Christopher Godfrey of the Department of Labor (DOL) Office of Workers’ Compensation Programs (OWCP) highlighted the recovery of medical bill payments under the Federal Employees’ Compensation Act through this settlement. He stated, “This settlement demonstrates the commitment of the DOL and its OIG in helping to ensure that funds issued through the program are paid appropriately.”
Special Agent in Charge Cynthia A. Bruce of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office, underscored the importance of patient-centered care over profit motives. Bruce stated, “DCIS will continue to work with our investigative partners to protect the funding entrusted to the Defense Health Agency that serves our military members and their families.”
Special Agent in Charge David Spilker of the Department of Veterans Affairs Office of Inspector General’s (VA OIG) Southeast Field Office, emphasized the VA OIG’s commitment to safeguarding the integrity of VA healthcare programs and taxpayer funds through this civil settlement.
Special Agent in Charge Amy K. Parker of the U.S. Office of Personnel Management, Office of the Inspector General (OPM OIG), addressed the violation of patient trust and the compromise of the Federal Employees Health Benefits Program (FEHBP) when providers submit false claims for unnecessary tests. Parker stated that this settlement demonstrates OPM OIG’s dedication to protecting patients and safeguarding the FEHBP from fraudulent claims.
The civil settlement also resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by current or former employees of Physician Partners of America and its affiliates. These whistleblowers, including Donald Haight, Dawn Baker, Dr. Harold Cho, Dr. Venus Dookwah-Roberts, and Dr. Michael Lupi, will receive a portion of the recovery for bringing these issues to light.
The resolution in this case was a collaborative effort between various government agencies, including the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; the U.S. Attorney’s Office for the Middle District of Florida; HHS-OIG; VA OIG; DCIS; DOL OIG; and OPM OIG. This case underscores the government’s strong focus on combating healthcare fraud through tools like the False Claims Act. The public is encouraged to report any potential fraud, waste, abuse, and mismanagement to the Department of Health and Human Services.
The establishment of the COVID-19 Fraud Enforcement Task Force by the Attorney General in May 2021 further demonstrates the commitment to preventing and combating pandemic-related fraud. This task force aims to enhance fraud prevention efforts, uncover fraudulent activities, and share insights gained from enforcement actions. The Department of Justice provides resources and information on its response to the pandemic online, and encourages reporting of potential fraud affecting COVID-19 government relief programs through various channels, including the Civil Division’s Fraud Section, the National Center for Disaster Fraud (NCDF) Hotline, and the NCDF Web Complaint Form.
Senior Trial Counsel David W. Tyler of the Civil Division and Assistant U.S. Attorney Lindsay Saxe Griffin for the Middle District of Florida handled this matter. It is important to note that the claims resolved by the settlement are allegations only, and there has been no determination of liability.
