The owners of Nason Medical Center must pay the federal government more than $1 million to settle allegations that they committed health care fraud, ending a closed-door investigation that lasted many months.
The U.S. Attorney’s Office said Wednesday that the urgent care network submitted claims to Medicare, Medicaid and TRICARE for services provided by physicians, even though treatment had actually been delivered by physician assistants.
They also ordered and billed the government for tests that weren’t medically necessary, including potentially harmful CT scans, and filed claims for services provided by a radiology technician who did not hold a current South Carolina license.
Additionally, Nason Medical Center billed the government for a higher-priced drug used to prevent tetanus infections, even though they actually administered a cheaper version.
“Health care fraud is a very high priority in this office,” U.S. Attorney for South Carolina Bill Nettles said in a prepared statement. “This case is particularly egregious because it involves allegations of profiting by exposing patients to unnecessary radiation in the CT scans.”
Nason Medical Center, which first opened in Mount Pleasant in 2005 and quickly expanded throughout the Lowcountry, includes five offices in Mount Pleasant, North Charleston, Summerville, and James Island.
Dr. Gary Headden, a physician at Nason Medical Center, said in a prepared statement that the business concedes billing errors were made between 2009 and 2011, but that they have not admitted any intentional wrongdoing.
Dr. Barron Nason, who partially owns the business, did not return a message to discuss the settlement on Wednesday.
Bob Hamilton, who stepped down as CEO of Nason Medical Center in October, was also responsible for committing fraud, according to federal news release. He remains on the company’s board of directors and continues to own a large percentage of the urgent care network, a spokesman for the company said last year.
Nason Medical Center may remain open, with stipulations. It may not offer CT scans or ultrasounds — a condition the business agreed to last May when news of an ongoing investigation broke. It may still provide X-rays, but the centers must take down all “emergency” signs and stop advertising emergency services — an order which the S.C. Department of Health and Environmental Control has already instructed them to comply with.
Among other requirements, the business must engage the services of an independent monitor, chosen by the Office of Inspector General.
“Being a health care provider in federal health care programs such as Medicare and Medicaid is a privilege, not a right. When health care providers order medically unnecessary procedures such as CT scans and submit other improper claims just to boost profits, they threaten both the health of their patients and the financial integrity of the Medicare and Medicaid programs,” said Derrick Jackson, special agent in charge at the U.S. Department of Health and Human Services, Office of Inspector General. “In an effort to ensure Nason Medical’s egregious billing history is not its future, the company agreed to a rigorous 5-year Corporate Integrity Agreement we crafted to hold them accountable.”
Evidence that the business was facing some sort of federal investigation became clear last year when Nason Medical Center abruptly announced that the government ordered them to stop offering CT scans and ultrasounds.
Later, court documents revealed financial distress and infighting among the business partners. Fariborz Ghadar, who owns part of Nason Medical Center’s parent company but was not mentioned in the federal settlement, sued Hamilton and Nason last year, claiming that the business is unable to pay outstanding bills in excess of $1.2 million and that Hamilton had manipulated accounts by as much as $300,000 to distort their true value.
At the time, Brian Duffy, an attorney for Nason and Hamilton, said, “None of this is a threat to the operations — it’s just ironing out issues among the partners.”
The settlement this week marks a significant setback for one of Charleston’s most well-known physicians. Nason, a former emergency room doctor, has long been Nason Medical Center’s public face, appearing on most of its commercials and billboards. He told The Post and Courier last year that he launched this business because he hated how hospitals favored profits at the expense of patient care. “I started Nason Medical Center because I loved emergency medicine and wanted to save it,” he said.
On Wednesday, Nettles revealed that the government launched an investigation into the business after former Nason Medical Center employees filed a whistleblower lawsuit under the False Claims Act. That law allows the government to recover actual damages and penalties of three times the actual damages and up to $11,000 per false claim. The settlement the federal government reached with Nason Medical Center, totalling $1,021,778.26, includes repayment of actual damages and penalties, Nettles said.
Under the False Claims Act, whistleblowers are entitled to share in any recovery received by the government. In this case, two whistleblowers will receive 18 percent of the funds of the settlement, or $183,920.08, plus they are entitled to their costs and attorney fees.
One whistleblower claimed he was terminated for his efforts to stop the fraudulent billing, prosecutors said. If that is true, he is entitled to recover for his personal damages as well, they said.
Reporter Glenn Smith contributed to this report. Reach Lauren Sausser at 937-5598.