Federal and state prosecutors announced a nearly $1.7 million settlement resolving claims that a former Indiana physician and his clinic billed Medicaid for tests they did not perform, after an investigation found a pattern of inflated urine-screening claims tied to opioid-prescribing practices.
The United States Attorney for the Northern District of Indiana announced a settlement totaling almost $1.7 million to resolve civil claims that a former doctor defrauded both the State of Indiana and the federal government. The case centers on billing practices at Wagoner Medical Center, L.L.C., owned and operated by former physician Don J. Wagoner during the years in question.
According to court documents, during 2011 through 2013 Wagoner required patients seeking opioid or other pain prescriptions to give urine samples for drug screening. Rather than running multiple separate analyses, the practice used a single urine sample and a low-cost multiplexed screening kit that tested for multiple drugs at once.
The defendants billed Indiana Medicaid at rates consistent with multiple separate tests, receiving $171.27 or more per patient while Medicaid rules permitted billing of $20.83 per patient for the kind of single-sample testing actually performed. Prosecutors say the defendants falsely certified they had collected and separately analyzed nine or more urine samples for each patient when they had not.
That billing practice generated more than 5,000 claims and produced a nearly $1 million overpayment from Indiana Medicaid, authorities allege, and the overpayments were not repaid. On December 29, 2017 the United States and the State of Indiana filed a Complaint under the False Claims Act seeking recovery of the overpayments and civil penalties, and the settlement resolves that litigation.
Indiana Medicaid is a joint federal-state program that covers low-income residents who otherwise could not afford care, and both the federal False Claims Act and the Indiana Medicaid False Claims Act authorize recovery of amounts paid in false claims plus civil penalties. The settlement addresses those recovery provisions and the broader goal of deterring billing fraud against public health programs.
In 2013 Mr. Wagoner permanently surrendered his licenses to prescribe drugs and to practice medicine after a state criminal investigation into his opioid prescribing, which led to felony drug dealing convictions. The civil action and settlement focused on the financial harm to Medicaid rather than the earlier criminal proceedings, but the two tracks intersected in the overall probe of his practice.
United States Attorney Adam L. Mildred framed the result plainly, saying: “Although they no longer are endangering vulnerable Medicaid patients by practicing medicine, former physician Don Wagoner cannot be allowed to retain the fruits of his fraudulent Medicaid claims,” said United States Attorney Adam L. Mildred. “The U.S. Attorney’s Office will continue to make it a priority to pursue investigations and cases to recover funds that were fraudulently received from the Medicare and Medicaid programs.”
The settled case was brought by the United States Attorney’s Office for the Northern District of Indiana together with the Indiana Medicaid Fraud Control Unit within the Indiana Attorney General’s Office. Assistant United States Attorney Wayne T. Ault served as lead counsel for the federal plaintiff in the litigation and settlement negotiations, which closed this chapter of the civil dispute.
