Nextcare Inc. Pays $10M for Medicare Scam

Nextcare Inc., an Arizona-based company, has agreed to pay $10 million to settle federal and state allegations that it submitted false claims, the Justice Department announced today.

The settlement resolves allegations that Nextcare submitted false claims to Medicare, TRICARE and the Federal Employees Health Benefits Program, as well as the Medicaid programs of Colorado, Virginia, Texas, North Carolina and Arizona, by billing for unnecessary allergy, H1N1 virus and respiratory panel testing.

The United States also alleged that Nextcare inflated billings for urgent care medical services in the years under review, a practice known as upcoding.

"This settlement demonstrates the Justice Department’s commitment to ensuring that federal health care dollars are spent appropriately," said Stuart Delery, Acting Assistant Attorney General for the Civil Division.

Nextcare is an owner of a chain of urgent care facilities with locations in Arizona, Colorado, Texas, North Carolina, Ohio and Virginia.

"Health care providers who administer unnecessary services or who overcharge for care will be held accountable," Delery added.

As a condition of the settlement, NextCare Inc. is also required to enter into a Corporate Integrity Agreement with HHS-OIG under which the company will be monitored for a period of five years to ensure that in the future it complies with all federal healthcare program rules.

The allegations resolved by today’s settlement were initially raised in a lawsuit filed against NextCare by former NextCare employee Lorin Cohen. Under the False Claims Act, private citizens acting as relators can bring suit on behalf of the United States and share in the recovery. Ms. Cohen will receive $1.614 million as her share of the recovery.

This resolution is part of the government’s emphasis on combating health care fraud and another step forward for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, a collaborative effort launched in May 2009 by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services (HHS).

Through the False Claims Act alone, the Justice Department has recovered more than $7.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $11.3 billion.

Nextcare Inc.’s actions wasted taxpayers’ dollars and compromised the well-being of patients, according to Daniel R. Levinson, Inspector General of the Department of Health and Human Services (HHS-OIG).