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U.S based Medical Treatment Provider to Pay Over $14.9 Million to Settle Alleged False Claims


The settlement addresses allegations that from January 1, 2015, to December 31, 2019, Bluestone knowingly submitted claims for two E&M codes: the domiciliary rest home visit code for established patients (99337) and the chronic care management code (99490), which did not accurately reflect the level of service provided.


Bluestone Physician Services of Florida LLC, Bluestone Physician Services, P.A., and Bluestone National LLC, which operate in Florida, Minnesota, and Wisconsin respectively, have agreed to a $14,902,000 settlement. This settlement resolves accusations that they knowingly submitted claims for specific Evaluation and Management (E&M) codes for services provided to chronic care patients in assisted living and other care facilities, which did not comply with Medicare, Medicaid, and TRICARE requirements.


“Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue health care providers that defraud the taxpayers by knowingly submitting inflated claims.”


The settlement addresses allegations that from January 1, 2015, to December 31, 2019, Bluestone knowingly submitted claims for two E&M codes: the domiciliary rest home visit code for established patients (99337) and the chronic care management code (99490), which did not accurately reflect the level of service provided. The federal government will receive $13,842,482 from the settlement, while the states of Florida and Minnesota will receive $1,059,518.



“Fraudulent billing undermines the integrity of government healthcare programs and diminishes legitimate services and resources for Minnesotans,” said U.S. Attorney Andrew M. Luger for the District of Minnesota. “Healthcare companies that institute a practice of upcoding and unnecessary billing will be held accountable for their misconduct.”


“The submission of false claims to Medicare for chronic care services will not be tolerated in the Middle District of Florida,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “This resolution sends a message to the provider community and to our district that we will actively investigate and prosecute this kind of conduct whenever it appears.”


“When health care providers submit false claims to taxpayer-funded federal health care programs, including inappropriately inflating claims to boost profits, the public’s trust in our nation’s medical providers and the integrity of federal health care programs are put at risk," said Special Agent in Charge Mario M. Pinto of the Department of Health and Human Services, Office of Inspector General (HHS-OIG) Chicago Regional Office. “We will continue to work together with our law enforcement partners to ensure that those who engage in conduct as alleged in this case are held accountable. Furthermore, the OIG’s five-year compliance agreement is designed to ensure that the alleged behavior will not be repeated.”


As part of the settlement, Bluestone has entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG. This agreement obligates Bluestone to establish and maintain a compliance program that meets specific criteria and to undergo reviews by an Independent Review Organization to assess whether its Medicare claims were medically necessary, properly documented, and correctly coded.


The civil settlement also resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by Lisa Loscalzo, the former General Manager for Bluestone’s Florida market. These provisions allow private individuals to file lawsuits on behalf of the United States and receive a portion of any recovery. The qui tam case is titled U.S. ex rel. Loscalzo v. Bluestone Physician Services of Florida, Bluestone Physician Services, P.A., Bluestone National, LLC et al., 20-cv-295-FtM-38NPM (M.D. Fla).


The settlement also resolves related allegations investigated by the U.S. Attorney’s Office for the District of Minnesota. Ms. Loscalzo will receive $2,831,380 from the settlement.

The resolution of this matter resulted from a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorneys’ Offices for the District of Minnesota and the Middle District of Florida, with assistance from HHS-OIG, the Defense Criminal Investigative Service, and the FBI.


This investigation and resolution highlight the government’s commitment to fighting healthcare fraud. A key tool in this effort is the False Claims Act. Tips and complaints about potential fraud, waste, abuse, and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).



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