On October 4, 2019, the U.S. Attorney’s Office for the Central District of California announced a settlement in which the Retina Institute of California Medical Group, its former CEO, and several of its physicians paid the United States and California approximately $6.65 Million to settle False Claims Act allegations.  The settlement related to accusations of billing for unnecessary eye exams, improperly waiving Medicare co-payments, and violating other regulations.

 Between January 2006 and August 2017, the retinal group allegedly billed public health programs by misclassifying simpler exams as being more complex and using billing codes for patients with severe or emergency conditions. The retinal group also allegedly waived Medicare co-payments and deductibles without proper documentation of financial hardship and without reasonable collection efforts, which was viewed as intending to induce referrals.  Finally, the Department of Justice’s press release note that the defendants allegedly billed Medicare and Medicaid for “medical services that weren’t performed, were unnecessary, not documented in the medical record or were not in compliance with applicable rules and regulations.”

The arrangement described above was uncovered as a result of a whistleblower claim filed by Bobbette Smith and Susan Rogers who worked for the retinal group as administrators.  The case was initially filed in 2013 and unsealed in 2016.

The settlement serves as yet another reminder of the Department of Justice’s increased focus on individual liability and refusal to allow the resolution of allegations against a corporation to provide protection to individuals accused of engaging in wrongdoing.  These principles – memorialized in the September 2015 Yates Memo – have resulted in a significant uptick in the number of cases brought against corporate executives and settlements involving the resolution of individual liability.