Heal 360 Owner and Clinics Agree to Pay $20 Million to Resolve FCA Allegations Involving COVID-19 Uninsured Program

Heal 360 Owner and Clinics Agree to Pay $20 Million to Resolve FCA Allegations Involving COVID-19 Uninsured Program

On October 7, the US Department of Justice (DOJ) announced that Heal 360 Urgent Care PLLC, Heal 360 Primary Care PLLC, and their owner, Dr. Mohammed Amer Mohiuddin, agreed to pay $20 million to resolve FCA allegations. The government alleged that they knowingly submitted or caused the submission of false claims for evaluation and management services that were not performed to the Health Resources & Services Administration COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program (HRSA COVID-19 Uninsured Program), which reimbursed eligible providers for COVID-19 tests, testing-related items and services, treatment, and vaccines performed on uninsured individuals between May 2020 and April 2022. 

According to the government, Heal 360 operated dozens of COVID-19 testing sites in Texas, most of which were walk-up or drive-through testing sites where Heal 360 staff performed specimen collection services through nasal swabs while patients remained in their vehicles. The government alleged that, from January 1, 2021, through March 23, 2022, Heal 360 and Mohiuddin billed these visits as evaluation and management services, rather than specimen collection, in order to obtain reimbursement at substantially higher rates. To support those false claims, the government alleged that Heal 360 and Mohiuddin generated fake medical records prepared by remote scribes overseas, and Mohiuddin was listed as the rendering physician on most claims even though he did not visit or treat patients at the COVID test sites. The settlement resolves two qui tam actions, and the relators will receive $3,400,000 of the proceeds from the settlement. 

The cases are U.S. ex rel. Hooper et al. v. Heal 360 Primary Care, PLLC et al., No. 4:21-cv-00569 (E.D. Tex.), and U.S. ex rel. Hasan v. Heal 360 Urgent Care, PLLC et al., No. 3:22-cv-1333-E (N.D. Tex.). 

Read the DOJ’s press release here and the settlement agreement here.

The claims resolved by the settlements are allegations only, and there has been no determination of liability.

Court Grants Janssen Summary Judgment in Kickback-Based FCA Case Over Free Practice Support Services

On September 30, Judge F. Dennis Saylor IV of the US District Court for the District of Massachusetts granted summary judgment in favor of Janssen Biotech, Inc.in a declined qui tam action. The relator alleged that Janssen gave physicians free business consulting to induce them to prescribe its infusible medications, Remicade and Simponi ARIA, in violation of the Anti-Kickback Statute (AKS) and the FCA. The relator, a former Janssen employee, filed suit in October 2016, and the United States and the states declined to intervene in August 2019.

Janssen’s Area Business Specialists (ABS) program advised physician practices on setting up and running in-office infusion suites, using slide decks that Janssen’s internal review committee approved on topics such as “Billing and Coding for Infusion.” The relator claimed that these services amounted to free business consulting that went beyond lawful marketing and product support to improper remuneration. Janssen argued that the services were not remuneration, that it did not act knowingly and willfully, and that the services were protected speech under the First Amendment.

The relator conceded that the approved slide decks were lawful and based her claims instead on what the ABS said in live meetings without offering any concrete evidence as to anything discussed or done in any of those meetings. She submitted no affidavit, deposed no other ABS, and offered no testimony from any physician or practice manager. The court also found no evidence that Janssen’s employees knew or considered that the services were unlawful. The court did, however, reject Janssen’s First Amendment defense, reasoning that when valuable speech is the quid in quid pro quo, banning such arrangements would survive First Amendment scrutiny. 

The case is United States ex rel. Long v. Janssen Biotech, Inc., No. 1:16-cv-12182-FDS (D. Mass.). 

Read the court’s order here.

Signal Diagnostics to Pay $20.5 Million to Resolve FCA Allegations Over Retained COVID-19 Overpayments

On September 30, the DOJ announced that Signal Diagnostics LLC, a Los Angeles clinical laboratory, agreed to pay $20.5 million to resolve allegations that it knowingly kept federal COVID-19 funds it should have returned. During the pandemic, the HRSA Uninsured Program reimbursed providers for COVID-19 testing performed on uninsured individuals. Between October 2020 and March 2022, Signal billed the program for COVID-19 testing and specimen collection. 

The government alleged that Signal billed the program for patients who in fact had insurance and then failed to repay the money once it learned of the problem. Signal began an internal audit around January 2022 and identified ineligible claims, including cases where its internal system created several profiles for the same individuals containing differing insurance information. Signal then spent until May 2023 auditing and calculating the overpayment, but, according to the government, knowingly and unlawfully avoided repaying HRSA for those overpayments.  

Half of the $20,594,640.13 settlement amount is restitution, and Signal received a $7,956,936.89 credit for refunds it had already paid, leaving a balance of $12,637,703.24. In exchange, the government released its civil claims for the alleged conduct under the FCA, the Civil Monetary Penalties Law, the Program Fraud Civil Remedies Act, and common law theories, but reserved, among other things, any criminal liability and any liability of individuals. Signal did not admit liability. 

Read the DOJ’s press release here and the settlement agreement here.

The claims resolved by the settlements are allegations only, and there has been no determination of liability.