Debra Wong Yang
United States Attorney
Central District of California
United States Courthouse
312 North Spring Street
Los Angeles, California 90012
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November 7, 2006
Thom Mrozek (213) 894-6947
Los Angeles, CA - Comprehensive Cancer Centers, Inc. (CCC) has agreed to pay the federal government $900,000 to settle allegations that it knowingly caused the Medicare program to pay too much for services rendered at CCC's outpatient cancer center located at Desert Regional Medical Center in Palm Springs, United States Attorney Debra Wong Yang announced today.
The Los Angeles-based CCC paid $450,000 of the settlement on October 25, and it is required to pay the remaining $450,000, plus interest, by December 8.
The settlement resolves allegations against CCC contained in a "whistleblower" lawsuit. Pursuant to the settlement, the United States Attorney's Office has dismissed the lawsuit and today received notice that the dismissal had been approved by a federal judge in Riverside.
The lawsuit was filed pursuant to the qui tam provisions of the False Claims Act by Kay Green, a former employee of Desert Regional Medical Center. Desert Regional is owned by the Tenet Healthcare Corporation, which was also named as a defendant in the lawsuit, but is not part of the settlement announced today. Pursuant to a contract with Tenet, CCC manages the outpatient cancer center at Desert Regional.
The 2003 lawsuit alleged an "upcoding" scheme in which CCC knowingly caused Desert Regional to overcharge Medicare by improperly using certain diagnostic codes that resulted in higher reimbursement payments than the cancer center deserved. The lawsuit specifically alleged that CCC caused Desert Regional to misuse a diagnostic code which is supposed to be used only when separate and distinct medical procedures are performed on the same patient on the same day, but instead was used by Desert Regional to bill separately for related procedures that should have been submitted as a unit.
The settlement also resolves allegations that CCC caused Desert Regional to submit cost reports to Medicare that sought reimbursement for unreasonable management fees paid to CCC.
The lawsuit alleged that the fraudulent conduct occurred between 1997 and 2003.
CCC's $900,000 payment represents approximately double the government's damages. Pursuant to the False Claims Act, Mrs. Green will receive $189,000 – or 21 percent – of the recovery.
The case was investigated by the Department of Health and Human Services, Office of Inspector General.
CCC is paying the settlement without admitting any wrongdoing.
Tenet previously settled the allegations against it in the lawsuit in July by paying $452,417, which was part of a $900 million civil settlement that Tenet agreed to pay to resolve a number of investigations and lawsuits, the chief of which involved payments for "outlier" medical cases. That $900 million settlement is the largest False Claims Act settlement in the nearly 150 years since the law was enacted during the Civil War (see: http://www.usdoj.gov/usao/cac/pr2006/088.html).
Release No. 06-153
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