Morgan and Morgan’s whistleblower attorneys, on behalf of three relators, have filed a False Claims Act (FCA) qui tam lawsuit against wound care services provider Healogics, Inc.
The lawsuit alleges that Healogics defrauded public and private healthcare providers by generating unjustified and costly medical procedures and pressured partner hospitals to terminate doctors and other workers who did not go along with the so-called “Healogics Way.” Doing things the “Healogics Way,” claim the whistleblowers, involved, among other practices, fraudulently upcoding debridement procedures and falsifying patient eligibility for hyperbaric oxygen treatments (HBOT).
Healogics, headquartered in Florida, is the largest for-profit wound care center operator in the United States, with over 800 partner hospitals. At these hospitals Healogics treats chronic and non-healing wounds such as ulcers, infections, and burns. But according to the whistleblower lawsuit, Healogics, in order to increase profits, billed Medicare, Medicaid, Tricare, and private insurers for procedures that were more extensive than those actually performed or were not medically necessary.
Much of the alleged fraud revolves around the company’s handling of debridements, which is the removal of damaged tissue or foreign objects from a wound. For example, Healogics allegedly billed insurers for costlier surgical/excisional debridements when a less expensive selective debridement was performed.
Many patients need debridement procedures on a regular basis in order to keep wounds clean, which can make this particular procedure a popular target for up-coding.
Healogics also allegedly billed for HBOT on patients whose diagnoses were fraudulently altered to qualify them for the costly treatment, then were reimbursed by Medicare at around $325 per session. HBOT, or Hyperbaric oxygen therapy, is a procedure that helps increase the oxygen level in patients' bloodstream.
The whistleblowers who filed the Healogics qui tam lawsuit claim that they were pressured to go along with the Healogics coding directive and forced out when they refused.
One of the whistleblowers, a licensed medical doctor, asserts that his contract with Healogics was not renewed after he refused to code enough of the higher revenue producing surgical/excisional debridements, even though his patients were healing quicker and at lower cost. Another whistleblower, a former Healogics Medical Director, says that he was terminated for refusing to upcode debridements and make more money for Healogics.
Morgan and Morgan amended its initial complaint for the now unsealed lawsuit (United States vs. Healogics) to exclude more than 500 hospitals previously named and include new exhibits that support the case’s allegations.
“The removal of the hospitals was a strategic decision, and should not be interpreted as a statement on their liability or involvement. The partner hospitals were a necessary party to the schemes alleged and we intend to seek discovery to firmly establish their role,” said John Yanchunis of the Morgan & Morgan Complex Litigation Group, counsel for the three whistleblowers.
The amended United States vs. Healogics complaint can be read in its entirety here.