Anesthesiology service provider pays almost $1M to settle False Claims Act liability

HOUSTON - Northwest Anesthesiology and Pain Services (NWAP) has agreed to pay $999,999 to resolve potential violations related to the submission of claims for reimbursement to Medicare for services rendered by its independently contracted pain management practices, announced acting U.S. Attorney Jennifer B. Lowery.

NWAP is an anesthesiology service provider in Houston and surrounding areas.

The allegations include violations of the False Claims Act (FCA) and the physician self-referral law (aka Stark Law).

In 2019, NWAP's former president Donald Carmichael hired Stacey Green and her company Remedy Physician Solutions as an independent contractor to manage NWAP's pain management practices. NWAP gave Green authority over the practices' compensation and discretionary productivity bonus payments.

Following an internal investigation, NWAP claims Green instructed NWAP's billing company to calculate bonus payments based on lab referrals minus costs, fees and expenses rather than calculating bonuses properly based on the practices' productivity as provided for in their agreements. NWAP suspected this was done to increase total collections, which formed the basis of Green's management fee.

From Jan. 1, 2019, through Dec. 31, 2021, NWAP reported it paid approximately $1.8 million in bonus payments as a result of the contractor's misconduct.

The government alleges such actions created improper financial relationships between NWAP and its independently contracted pain management practices as NWAP was paying bonuses to these practices from its lab revenue as allegedly thinly veiled kickbacks for referrals.

"The Stark Law safeguards the integrity of the Medicare program by ensuring patients receive care based on their physician's independent medical judgment and not any personal financial interests," said Lowery. "Our office remains committed to protecting the program and reinforcing the public trust in our federal healthcare system, and we will continue to hold those accountable for violating these safeguards."

"Prohibited referrals and financial incentives in health care jeopardize patient safety and drive unnecessary medical services. Additionally, submitting false claims to Medicare for services resulting from unlawful referrals undermines the integrity of federal health care programs and diminishes public trust," said Special Agent in Charge Jason E. Meadows of the Department of Health and Human Services - Office of Inspector General (DHHS-OIG). "DHHS-OIG remains resolute in holding accountable those who engage in fraud and disregard the patient-first values central to the medical profession."

This settlement stems from NWAP's self-disclosure to the U.S. Attorney's Office (USAO) and DHHS-OIG. NWAP received credit for its self-disclosure and cooperation with the investigation.

The USAO conducted the investigation with assistance from DHHS-OIG. Assistant U.S. Attorney (AUSA) Michelle Luong handled the matter along with former AUSA Andrew Bobb.