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July 2023 Labs in Court

by | Jul 4, 2023 | Essential, Lab Compliance Advisor, Labs in Court

Recent cases involve COVID-19 fraud, UDTs, and the latest HIPAA Right of Access settlement.

Colorado Physician Gets Prison for COVID-19 Relief Fraud

Case: From March through June 2020, when COVID-19 was putting added financial pressure on many small healthcare providers, the supervisory physician of a Colorado medical clinic applied for and received $250,000 in federal emergency small business relief funds from the Accelerated and Advance Payment and Paycheck Protection programs. Rather than relaying it to the clinic, however, Dr. Francis F. Joseph, 58, used it for personal expenses. In January, a federal Colorado jury convicted Joseph of healthcare and wire fraud (while acquitting him on a charge of theft of government property related to a separate COVID-19 relief payment).1 On June 1, he received his sentence—two and a half years in prison.2

Significance: The expected crackdown against misusers of federal Coronavirus Aid, Relief, and Economic Security (CARES) Act COVID-19 relief funds has begun in earnest. As of early June, the Fraud Section of the U.S. Department of Justice’s (DOJ’s) Criminal Division has prosecuted more than 210 defendants in more than 140 criminal cases for CARES Act abuses, seizing more than $80 million in cash as well numerous real estate properties, cars, boats, and other luxury items purchased with the proceeds. In April, the DOJ enlisted the U.S. Department of Health and Human Services (HHS) Office of Inspector General’s participation in the campaign by launching the 2023 National COVID-19 Health Care Fraud Enforcement Action to target providers for CARES Act fraud, manufacture of counterfeit vaccination records, and false billing of over-the-counter COVID-19 testing kits.3

Georgia Pain Center, MD Owner Pay $625,000 to Settle Urine Drug Test & E&M Services False Billing Charges

Case: Georgia Pain Management, P.C., its physician owner, and ambulatory surgical center Samson Pain Center, P.C., have agreed to shell out $625,000 to settle claims of falsely billing Medicare and TRICARE for medically unnecessary urine drug screening tests (UDTs) and evaluation and management (E&M) services between May 1, 2015 and December 31, 2019. The government also claims that the pain clinic and its owner entered into an arrangement in which a reference lab paid the salary of a Georgia Pain employee in exchange for the physician owner’s referral of UDTs that weren’t medically necessary—a violation of the Anti-Kickback Statute. By subsequently billing the federal health programs for these illegally referred tests, the government alleges, they also violated the False Claims Act. The whistleblower who brought the original case will get $118,000 of the recovery.4

Significance: In general, you may not separately bill Medicare for E&M services provided on the same day as another medical procedure. However, E&M services provided on the same day can be billed using Modifier 25 if those services are:

  • Significant,
  • Separately identifiable from, and
  • Above and beyond the usual preoperative and postoperative care associated with the medical procedure.

The government accused Georgia Pain of using Modifier 25 to “improperly unbundle” routine E&M services that weren’t separately billable from other minor surgical procedures performed on the same day.4

Unauthorized Disclosure of Defendant’s Confidential Information Costs Whistleblowers Their Qui Tam Lawsuit

Case: Medical device product engineers serving as expert witnesses in a pair of multistate lawsuits involving hip replacements filed their own qui tam lawsuit against their ex-employer, DePuy Orthopaedics, for allegedly running a hip replacement fraud scheme. The courts issued protective orders barring the relators from using any of the confidential product design information they received from DePuy as part of the qui tam case for the other lawsuits. When the relators violated the protective orders, the federal court granted a motion from DePuy to dismiss the qui tam lawsuit. The relators then appealed to the US Court of Appeals for the First Circuit, but to no avail.

Significance: The protective orders stated that, if the relators disclosed any of the protected information, they would bear the burden of proving that it had become public by the time of disclosure—a claim the relators made, but couldn’t prove. Disobeying a protective order qualifies as “extreme behavior” justifying dismissal, the court reasoned. Adding to the seriousness was the fact that the relators’ unauthorized disclosure of DePuy’s confidential information harmed the company and was part of a pattern of “repeatedly flouting court orders.” Accordingly, the appeals court concluded that the lower court didn’t abuse its discretion in dismissing their whistleblower case.5

OCR Maintains HIPAA Right of Access Crackdown

Case: The HHS Office for Civil Rights (OCR) is continuing to come after providers for failing to give patients timely access to their protected health information (PHI) under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule. The latest case, announced on May 8, targets a Pittsburgh psychotherapy counselor who was fined $15,000 for not providing the medical records of three minor patients to the patients’ personal representative, their father.

Significance: This is the 44th HIPAA Right of Access settlement OCR has entered into since launching the initiative in April 2019. Seven of these settlements have been for $100,000 or more. In addition to the fines, many settling providers have had to agree to implement a HIPAA corrective action plan (CAP) that permits close monitoring by the OCR. These enforcement actions aren’t usually a surprise. When a patient files a complaint, the OCR’s first step is to intervene with the provider to resolve the situation; it’s only when the provider continues to deny access that the OCR takes enforcement action.6

OCR Right of Access Initiative Settlements Scorecard

Provider Settlement Amount Allegations
Memorial Hermann Health System $240,000 Texas nonprofit health system’s billing department failed to provide patient complete medical and billing records despite five different requests
Banner Health ACE $200,000 OCR cites two occasions in which Phoenix-based not-for-profit health system took about six months to provide patients their requested PHI
Rainrock Treatment Center, LLC dba Monte Nido Rainrock $160,000 Florida eating treatment disorder center took more than eight months to fulfill patient’s request for a copy of her medical records
St. Joseph’s Hospital and Medical Center $160,000 Phoenix hospital refused to provide PHI to patient’s mother even though she was his legal representative
ACPM Podiatry $100,000 In response to initial complaint and OCR intervention, Illinois podiatry practice agreed to provide patient requested medical records but reneged despite patient’s multiple requests
Dr. Robert Glaser $100,000 New York cardiovascular disease and internal medicine doctor didn’t cooperate with OCR’s investigation or respond to its data requests after not providing patient a copy of their medical record
NY Spine Medicine $100,000 Neurology practice refused patient’s multiple requests for copies of specific diagnostic films
Bayfront Hospital $85,000 Florida hospital didn’t provide expectant mother timely access to the PHI of her unborn child
Korunda Medical $85,000 After first refusing to provide it at all, Florida primary care and interventional pain management services provider sent patient’s PHI to third party in the wrong format and charged him excessive fees
Great Expressions Dental Center of Georgia, P.C. $80,000 Georgia dental practice refused to give patient access to her record because she wouldn’t pay the $170 copying fee
Children’s Hospital & Medical Center $80,000 Nebraska hospital failed to provide mother of minor patient timely access to her daughter’s medical records despite repeated requests
Renown Health, P.C. $75,000 Nevada private, not-for-profit health system didn’t timely honor patient’s request to transfer her electronic health record (EHR) and billing records to a third party
Sharp Rees-Stealy Medical Centers $70,000 California hospital and healthcare network didn’t timely honor request to transfer patient’s EHR to a third party
Beth Israel Lahey Health Behavioral Services $70,000 Massachusetts provider ignored request of personal representative seeking access to her father’s PHI
Southwest Surgical Associates $65,000  Group practice in Greater Houston, Texas, area failed to provide patient timely access to their requested PHI
Arbour Hospital $65,000 Massachusetts mental health services provider kept patient waiting five months before granting access to his PHI
University of Cincinnati Medical Center, LLC $65,000 Ohio academic medical center failed to respond to patient’s request to send an electronic copy of her medical records maintained in its EHR to her lawyers
Hillcrest Nursing and Rehabilitation $55,000 Massachusetts rehab agency failed to provide an individual’s personal representative with timely access to her son’s medical records
MelroseWakefield Healthcare $55,000  Massachusetts provider didn’t furnish personal representative timely access to medical records under a durable power of attorney based on mistaken belief that the power of attorney didn’t permit provision of those records
Erie County Medical Center Corporation $50,000 Buffalo, New York hospital didn’t timely provide individual a complete copy of his medical records
Housing Works Inc. $38,000 New York City nonprofit services provider refused patient’s request for a copy of his medical records
Peter Wrobel, M.D., P.C., dba Elite Primary Care $36,000 Georgia primary care practice failed to provide patient access to his medical records
Advanced Spine & Pain Management $32,150 Ohio pain services provider took nearly four months to provide patient requested medical records
Family Dental Care, P.C. $30,000 Chicago dental practice took five months to provide former patient complete access to her medical records
Fallbrook Family Health Center $30,000 Nebraska provider failed to provide timely access to medical records
Dr. Donald Brockley, D.D.M $30,000 Pennsylvania solo practitioner dentist failed to provide a patient a copy of their medical record
Denver Retina Center $30,000 Colorado ophthalmological services provider took eight months to provide requested medical records and lacked compliant access policies
Village Plastic Surgery $30,000 New Jersey practice failed to provide patient timely access to his medical records
Jacob and Associates $28,000 Psychiatric practice with two offices in California failed to provide a patient requested access to her medical records, ignoring her annual requests for five years in a row
Paradise Family Dental $25,000 Las Vegas dental practice refused to provide mother copy of her and her minor child’s medical records
Riverside Psychiatric Medical Group $25,000 California medical group didn’t provide patient copy of her medical records despite repeated requests and OCR intervention
Associated Retina Specialists $22,500 New York provider didn’t give patient a copy of her medical records until three days after OCR initiated its investigation, nearly five months after the patient’s first written request
Health Specialists of Central Florida Inc. $20,000 Florida primary care practice didn’t provide personal representative/daughter timely access to father’s medical records despite multiple requests
Coastal Ear, Nose, and Throat $20,000  Ormond Beach, Florida practice didn’t provide patient timely access to medical records despite multiple requests
Life Hope Labs, LLC $16,500 Georgia lab took seven months to provide medical records to patient’s personal representative/daughter
David Mente, MA, LPC $15,000 Pittsburgh licensed psychotherapy provider didn’t provide medical records of minor patients to their personal representative/father
Dr. Rajendra Bhayani $15,000 New York physician didn’t provide patient her medical records even after OCR intervened and closed the complaint
All Inclusive Medical Services, Inc. $15,000 California multi-specialty family medicine clinic refused patient’s requests to inspect and receive a copy of her records
Wake Health Medical Group $10,000 North Carolina primary care provider never furnished requested records despite charging patient $25 access fee
Wise Psychiatry, PC $10,000 Colorado psychiatric firm refused to provide personal representative access to his minor son’s medical record
Lawrence Bell, Jr., D.D.S. $5,000 Baltimore, Maryland dental practice failed to provide timely access to a patient’s medical record
Diabetes, Endocrinology & Lipidology Center, Inc. $5,000 West Virginia diabetes clinic made the mother of a minor patient wait nearly two years for access to his medical records
King MD $3,500 Virginia psychiatric practice didn’t provide patient access to her medical records even after OCR intervened, provided technical assistance, and closed the complaint
Includes enforcement actions up to June 1, 2023. Source: U.S. Department of Health and Human Services.


  1. https://www.justice.gov/opa/pr/physician-convicted-misappropriating-approximately-250000-covid-19-relief-programs
  2. https://www.justice.gov/opa/pr/physician-sentenced-stealing-approximately-250k-covid-19-relief-programs
  3. https://oig.hhs.gov/newsroom/media-materials/2023-covid-takedown/
  4. https://www.justice.gov/usao-ndga/pr/woodstock-pain-management-doctor-and-clinics-pay-625000-resolve-false-claims-act
  5. https://www.ca1.uscourts.gov/content/22-1047p_6571457
  6. https://www.hhs.gov/about/news/2023/05/08/hhs-office-civil-rights-enters-settlement-resolving-potential-hipaa-violation-right-access-initiative.html

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