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FWC Urogynecology Pays $1.7 Million to Resolve False Claims Case

The settlement of a lawsuit against a Florida urogynecology network ended in FWC Urogynecology agreeing to pay $1.7 million. The lawsuit took place in the United States District Court for the Middle District of Florida and centered on allegations that FWC Urogynecology had violated the False Claims Act by conducting improper billing practices.

U.S. Attorney Maria Chapa Lopez led the lawsuit, which alleged that FWC Urogynecology had knowingly used billing modifier 25 in cases where they did not provide the proper amount of services. As a result, the network received payment from the U.S. government for medical treatments to patients who had not received the treatment.

Medical billing involves coding guidelines that set the standard for how much certain treatments cost. The purpose of modifier 25 is so that healthcare providers only need to use one code whenever a patient receives two distinct treatments during the same session or day. While modifier 25 works to save time when it comes to billing, it also has the risk of abuse, as was the alleged case for FWC Urogynecology.

Lopez’s case cited examples of FWC Urogynecology using modifier 25 for cases where patients did not receive additional treatment. Some of the lawsuit’s examples were for patients who received pelvic floor therapies and lavage treatments but had the billing code for additional services that FWC Urogynecology did not perform.

The urogynecology network got its start in September of 2004 and has provided what it considers to be an “all-in-one” urology and gynecology service for women’s health in the Jacksonville, Florida area. FWC specializes in urinary disorders and pelvic treatments and surgeries.

While there are thousands of unique billing codes, healthcare providers have an obligation to use them correctly. The improper use of modifier 25 constitutes a violation of the False Claims Act, which prohibits the use of billing codes in ways that exploit the government or other financial services. For a violation of the False Claims Act to occur, the party must knowingly misuse the code.

One section of the False Claims Act allows for qui tam provisions, in which a private citizen, known as the relator, may file suit for violations on the government’s behalf, after which the government may take over the lawsuit. Holly Loebl, a former employee of an FWC Urogynecology network provider, was the relator in the modifier 25 allegations.

In addition to U.S. Attorney Lopez, Assistant U.S. Attorney Jeremy R Bloor, the Defense Criminal Investigative Service, and the U.S. Department of Health and Human Services conducted the related investigations.

FWC Urogynecology agreed to settle the case under the agreement that, from February 1, 2012, through January 12, 2017, the network knowingly used modifier 25 to receive additional payments from the government, even though patients did not receive any additional services. The settlement resolved the case without any determination of liability.

Penalties for False Claims Act violations include a civil fine in addition to the amount of the government’s damages. The relator who starts the lawsuit can receive part of this award. FWC Urogynecology will pay $1.7 million in settlement amounts. Loebl will receive $306,000 as her relator reward.

Attorney Lopez has said that “A primary mission of the United States Attorney’s Office is protecting Medicare, TRICARE, and other federal healthcare programs from fraud. Our Civil Division works tirelessly in the pursuit of providers who bill for services they do not provide.” The False Claims Act plays a very important role in this prevention of fraud.

The FWC Urogynecology case is not the first time that a healthcare provider has abused modifier 25. In 2005, the Office of the Inspector General conducted an analysis that showed more than a
third of cases with modifier 25 did not meet program requirements.

Many service payers have increased their level of caution when it comes to modifier 25, and frequently a healthcare provider will see a claim denial or reduction of payout. Insurance company Anthem announced that it would reduce payout for any modifier 25 billed services, though it decided not to after much opposition and discussion.

The U.S. Department of Justice has also conducted investigations into other potential billing code violations. One such case involved the use of primary prevention implantable cardioverter defibrillators that did not meet the proper criteria for the Medicare claims used. The case ended in settlements totaling $280 million across more than 500 hospitals.

The World Health Organization (WHO) oversees the International Classification of Diseases (ICD), which is the basis for proper billing codes. The current version of ICD includes over 55,000 billing categories, and the newest version, ICD-11 is in the works. The current revision timeline has ICD-11 going up for presentation to the World Health Association in 2019 and coming into common usage in 2022.

Cases like the allegations against FWC Urogynecology show the common concern of healthcare providers, insurance claims payers, and the U.S. government of proper medical billing procedures. The improper use of coding creates problems for payers who end up spending more than necessary when they could use that money for other, essential procedures. Patients start to feel the consequences when even rightful claims face denial due to caution and increased scrutiny.

Revisions to the ICD and new developments in medical billing and coding technology both point the direction to more accurate billing processes. The Fair Claims Act, which has seen many revisions since its enactment in 1863, will likely also change to fit the needs of the industry.

Lawsuits like United States ex rel. Holly Loebl v. Urogynecology Specialists of Florida, LLC and Florida Woman Care, LLC will continue to also play a role in setting standards for the healthcare industry.

“Misrepresenting alleged services to inflate costs is just plain and simple greed,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services.
“We will continue to thoroughly investigate healthcare companies that engage in schemes to defraud the American taxpayer.”


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