July 25, 2024

MINNEAPOLIS – Bluestone Physician Services of Florida LLC, Bluestone Physician Services, P.A. and Bluestone National LLC, operating in Florida, Minnesota and Wisconsin, respectively, have agreed to pay $14,902,000 to resolve allegations that they knowingly submitted claims for certain Evaluation and Management (E&M) codes for services related to the management of chronic care patients in assisted living and other care facilities that were not provided in conformity with applicable 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 resolves allegations that, during the period from Jan. 1, 2015, through Dec. 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), that did not support the level of service provided. The federal government’s share of the settlement is $13,842,482 and $1,059,518 will be paid to the States of Florida and Minnesota.

“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.”

In connection with the settlement, Bluestone has entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG, which requires Bluestone, among other obligations, to establish and maintain a compliance program meeting certain requirements and to submit to an Independent Review Organization’s review of Bluestone’s Medicare claims to determine whether such claims were medically necessary, appropriately documented, and correctly coded.

Bluestone said in a statement that its “highest priority is providing excellent care to our patients, who are among our nation’s most vulnerable, and we take compliance with all laws and regulations governing our industry very seriously. Nothing about this matter relates to the efficacy of the healthcare we provide, which has improved our patients’ care outcomes and has not been called into question. Rather, the allegations relate to medical record documentation issues that occurred under prior management between 2015 and 2019. While we deny the allegations, we have agreed to this settlement so we can focus exclusively on bringing effective, high-quality care to the fragile and medically complex patients who rely on us.”   

The civil settlement includes the resolution of 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. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned 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 civil settlement also includes the resolution of related allegations investigated by the U.S. Attorney’s Office for the District of Minnesota. Ms. Loscalzo will receive $2,831,380 in connection with the settlement.

The resolution obtained in this matter was the result of 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 FBI.

The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to HHS at 800-HHS-TIPS (800-447-8477).

Trial Attorneys Erin Colleran and Joanna Persio of the Civil Division’s Fraud Section, Assistant U.S. Attorneys Kristen E. Rau and Emily Peterson for the District of Minnesota and Assistant U.S. Attorney Kelley Howard-Allen for the Middle District of Florida handled the matter.

The claims resolved by the settlement are allegations only. There has been no determination of liability.


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