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Maryland hospital to pay more than $2 million to resolve False Claims Act case regarding Medicare, Medicaid

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BALTIMORE, MD—A Maryland health care facility will pay more than $2 million to resolve a False Claims Act case regarding the billing of services to Medicare and Medicaid.

Luminis Health Doctors Community Medical Center, Inc., (“DCMC”), and Diagnostic Imaging Associates, LLC (“DIA”), both located in Lanham, have agreed to pay the United States $2,002,052.17 to resolve allegations that they violated the federal False Claims Act.

According to the settlement agreement, DCMC and DIA entered into a long-standing arrangement whereby DIA billed Medicare and Medicaid under its assigned number for both the professional services provided by DIA and for the technical services rendered by DCMC’s outpatient cancer screening facility (the “Center”). DIA then paid the Center a portion of the Medicare or Medicaid reimbursed global fee for the technical services provided by the Center. The Center was not enrolled in Medicare and Medicaid during that time, so it did not have a billing number and was not eligible for reimbursement from those programs.

The civil settlement was announced by United States Attorney for the District of Maryland, Erek L. Barron and Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.

“The resolution in this matter demonstrates the commitment of the United States Attorney’s Office to rigorously protect Medicare and Medicaid from those who would flout the regulations prescribed by those programs for the reimbursement of medical care,” said Barron.

“Health care providers have a responsibility to follow the law, and exploiting insurers for personal gain defies that objective,” stated Dixon. “HHS-OIG is committed to safeguarding the integrity of our federal health care programs. We thank the tireless efforts of our agents and law enforcement partners to fight fraud that targets these programs and to protect taxpayer dollars that fund them.”

DCMC owns and operates a hospital (“Hospital”) that provides acute care services, including radiation oncology and breast health care services. Specifically, the Hospital provides biopsy and mammography services and bone density screenings to diagnose and treat breast cancer and other diseases through an outpatient cancer screening facility (the Center). DIA provides diagnostic and interventional radiology services. DIA executed a written agreement with the Hospital to provide diagnostic and interventional radiology services to the Center, as well as the interpretation of such tests. The Center, through the Hospital, provided the imaging equipment, office space, technicians and supplies to facilitate the performance of the radiology-related tests.

The contract between the Hospital and DIA specified that tests performed at the Center would be billed by the Center on a global fee basis under the Center’s provider number, with DIA being paid a percentage of the Medicare or Medicaid reimbursed global fee for performing the professional component, that is, interpreting the tests. A global fee reflects payment for both the technical and professional components of a medical service billed together as a unit.

However, the Center did not obtain its own number under which it could bill Medicare and Medicaid for the services provided to beneficiaries insured by those programs. Between March 15, 2010, and October 19, 2020, by agreement between the Hospital and DIA, DIA submitted claims to Medicare and Medicaid using DIA’s supplier number to bill those programs for both the professional and technical components of the services rendered in the Center even though the Hospital performed the technical component of the Center’s services. Both the Hospital and DIA knew that the Center did not have a billing number as required by Medicare and Medicaid to be eligible for reimbursement for rendered medical services.

The claims resolved by this settlement are allegations. The settlement is not an admission of liability by DCMC and DIA, nor a concession by the United States that its claims are not well founded. The case arose from DCMC’s and DIA’s reporting of the billing arrangement to the United States Department of Health and Human Services Provider Self-Disclosure Protocol; DCMC and DIA cooperated throughout the ensuing federal investigation conducted by the United States Attorney’s Office for the District of Maryland.

Photo by Sora Shimazaki from Pexels

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