Whistleblower Complaint Alleges False Billing At Healogics


The whistleblower complaint specifically claims that a document known as a “superbill” was placed in each patient’s chart at the wound centers prior to any visits. The superbill lists all procedures and corresponding billing codes. Physicians were supposed to “check off the procedures that were allegedly, but were in many instances not, done,”according to the lawsuit.


Former employees Michael Cascio and John Murtagh — both of whom had worked at Healogics-run clinics in Orlando — as well as Benjamin Van Raalte, a staffer at an Illinois clinic brought about the action. Another whistleblower lawsuit filed by former hyperbaric technicians Willie Arnold and Michelle Arnold, alleges similar fraud.


The extent of the litigation is far-reaching. More than 600 of the nearly 800 clinics Healogics partners with health care provider facilities to run are named as “defendant hospitals” in the suits, including Baptist Health of Northeast Florida, UF Health Gainesville and the Southeast Georgia Health System.


So far, none of those agencies have responded to the Business Journal’s request for comment.

Healogics is defending the company’s mission and its activities. In a statement provided to the Business Journal Oct. 9, a Healogics spokesperson said, “Providing the best wound healing care is Healogics’ top priority and our innovative treatments have helped countless patients. We have programs in place to ensure that our practices conform to applicable regulations and the conduct alleged would be inconsistent with Healogics’ core values and culture. We don’t believe that these lawsuits have any merit and we intend to defend ourselves vigorously.”


In an interview with the Business Journal on Sept. 24— before either of the lawsuits were made public — CEO Jeff Nelson said the company was “seeing double-digit growth these days.”


The company employs 3,500 employees nationwide, with almost 200 at its Jacksonville headquarters where it also runs a training facility.


Healogics incentivized defendant hospitals to contract with them by agreeing to provide hyperbaric oxygen tanks and other equipment, as well as the support staff and marketing to operate an on-site wound care clinic, according to the lawsuit.


“Defendant hospitals were informed by Healogics that defendant hospitals could expect certain profits from the wound care centers when the facilities are operated the ‘Healogics Way,’” the complaint reads.


If clinic directors did not meet certain benchmarks set out by Healogics for the number and kinds of treatments performed, they would be let go.


The lawsuit reads: “Once forced out, non-compliant program directors and physicians are replaced with ‘team player’ program directors and physicians who will go along with this scheme and perform or bill for higher revenue producing procedures whether they are medically necessary or not. … The scheme was carried out by the defendants with an ‘everyone wins’ explanation wherein patients received otherwise expensive treatments for little or no cost, doctors were able to bill extensively and grow wealthy, defendant hospitals improved their bottom line and Healogics’ revenue and corporate valuation exploded. The downside to this reasoning is that insurers, notably the government insurance program, were left holding the bag.”


If found guilty of conspiring to defraud a government agency, restitution and penalties which are based on the statutes of each state in which Healogics’ clinics were operated, could run into the millions. In Florida, for example, “A civil penalty of not less than $5,500 and not more than $11,000 for each false claim which defendant Healogics and defendant Florida hospitals caused to be presented to the State of Florida.”


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