Healogics Agrees to Pay United States Nearly $400,000 to Resolve Fraud Claims Brought by Whistleblower Represented by Brady & Associates

Healogics, Inc. has agreed to pay the United States $398,162.69 to settle claims that it violated the federal False Claims Act.

Healogics, which is based in Florida, manages wound care clinics throughout the United States. Some of the patients receiving wound care at clinics managed by Healogics are covered by federal health insurance programs, Medicare, Medicaid and Tricare.

Acting as a whistleblower on behalf of the United States, on March 2, 2016, a former employee of a clinic managed by Healogics, Laura McGraw, filed a lawsuit alleging that Healogics had defrauded the United States by causing unlawful claims to be submitted to federal health insurance programs.

Specifically, Ms. McGraw alleged that at clinics managed by Healogics, claims were submitted using “Modifier 25” to receive “upcoded” payments from federally funded health insurance programs. Modifier 25 is a payment code modifier a health care provider submits to indicate that the provider performed “evaluation and management” health care services that were unrelated to the other health care services received by the patient during an outpatient office visit. The settlement payment by Healogics resolves allegations that claims were made by clinics managed by Healogics to federal health insurance programs that improperly utilized Modifier 25 in cases where no such separate evaluation and management services were provided to patients.

After Ms. McGraw filed the lawsuit, attorneys for the United States Department of Justice investigated the matter and intervened in the case on June 20, 2018. For her efforts in filing the lawsuit on behalf of the United States and assisting the United States in the recovery, Ms. McGraw was awarded $91,577.42, which was 23% of the federal government’s recovery in the case.

The federal False Claims Act provides incentives for private citizens with knowledge of fraud against the United States and any of its agencies to come forward. Such whistleblower lawsuits must be filed “under seal” to allow the United States Department of Justice an opportunity to investigate prior to any public disclosure of the lawsuit. If the United States Department of Justice intervenes in the case, the False Claims Act generally provides for the whistleblower(s) to be awarded a share of between 15 percent and 25 percent of the United States’ recovery.

Ms. McGraw was represented by attorneys of the law firm Brady & Associates. Michael Brady and Sara Ballew can be contacted at Brady & Associates by phone at 913-696-0925.

Department of Justice, U.S. Attorney’s Office, Northern District of Iowa on June 20, 2018: Nationwide Wound Services Provider Agrees to Pay Nearly $400,000 to Resolve False Claims Act Allegations
The Kansas City Star, by Andy Marso, on 6/28/18: Olathe Medical Coder Gets $91,000 from Healogics False Claims Settlement