Medical Group to Pay $355,000 to Medicare
In the first settlement of its kind involving a new federal law to prevent the private sector from overcharging the government for services, a La Jolla medical group agreed Thursday to pay the government $355,000 for its part in a lawsuit brought by one former eye doctor against another accused of defrauding Medicare.
The settlement, between Scripps Clinic and Research Foundation/Scripps Clinic Medical Group and the Center for Law in the Public Interest in Westwood, was signed in federal court here. The center filed the suit last year on behalf of former Scripps ophthalmologist Dr. Paul E. Michaelson.
It is the first time a suit has been resolved under the federal False Claims Amendments Act of 1986, which gives whistle-blowers a forum and financial incentives to report overcharges involving federal programs, attorney John Phillips of the center said.
The original suit sought damages of between $3.7 million and $6.3 million.
Still pending is a lawsuit against former Scripps ophthalmologist Dr. Raymond Y. Chan, accused of overcharging the federal Medicare program more than $300,000 between 1984 and 1986.
The charges stem from allegations that Chan billed Medicare for eye surgery not performed and for unnecessary surgery, Phillips said.
“The settlement is only with the Scripps entities and doesn’t cover Chan,” he said. “We are still pursuing him vigorously. He is the person most directly responsible.”
“Basically, we are pleased with the settlement and it shows we have no culpability,” Scripps spokesman Andrew Jowers said.
As part of the settlement, the clinic also agreed to create a new billing review committee for Medicare claims and hire an internal billing auditor, Jowers said.
“It is very painful to turn in a colleague,” Michaelson said through his lawyers. “I thought long and hard before I decided to file this case. I felt I had a moral obligation to stop these abuses, and the false claims act gave me a way to do it.”
50 Suits Filed
About 50 lawsuits have been filed under the False Claims Amendments Act throughout the country--the majority of them against defense contractors, Phillips said.
Under the federal law, whistle-blowers like Michaelson are entitled to a minimum of 15% and a maximum of 25% of any judgment. Phillips said Michaelson has agreed to donate his recovery money to various charities involved in vision-related programs for the poor and disabled.
“We believe the settlement will send a strong message to physicians and medical institutions,” Phillips said. “People who see abuses committed . . . can take action to see these people are brought to justice. . . .”
