On April 8, 2021, the U.S. Attorney’s Office for the District of South Carolina announced a $22.5 million settlement with a network of urgent care providers, Doctors Care, P.A. (Doctors Care), and its management company, UCI Medical Affiliates of South Carolina, Inc. (UCI), for alleged False Claims Act (FCA) violations.

According to the U.S. Attorney’s Office’s press release, Doctors Care submitted claims for payment falsely indicating that certain credentialed providers approved to bill Federal healthcare programs provided certain reimbursable services, when in reality, other clinicians that did not have the required billing credentials actually provided the services.

Whistleblowers employed by UCI originally filed the qui tam case, claiming that from 2014 to 2018, many providers at Doctors Care did not have the required billing credentials. Instead, in an effort to ensure payment, Doctors Care had “cheat sheets,” as employees called them, stating which uncredentialed providers should be linked to credentialed clinicians for claim submission purposes. The three-year investigation by the U.S. Attorney’s Office uncovered evidence of the “linking” scheme, including emails memorializing the “linking” and “well-organized cheat sheets.”

Federal healthcare programs require physicians and other providers to apply for approval to bill any services to the program or representative insurer or intermediary. This approval is known as a provider’s “billing credentials.” Providers are obligated to renew these billing credentials periodically and must obtain new credentials with new employment. As the whistleblowers alleged in their qui tam complaint, “the enrollment and credentialing process can often be costly in terms of time, resources, and administrative overhead,” but the intention of the enrollment and credentialing process is to protect beneficiaries from receiving care or services from unqualified or excluded providers. A provider cannot bill the Federal healthcare program for services to beneficiaries until he or she enrolls and is properly credentialed under that program.

Aside from the $22.5 million settlement, Doctors Care and UCI will be subject to a Corporate Integrity Agreement for five years. The Agreement requires UCI to retain an Independent Review Organization to perform a periodic claims review and states that the Department of Health and Human Services Office of the Inspector General will routinely monitor UCI.

Of particular note for a Federal healthcare fraud case, there was no allegation in this FCA case that the fraudulent billing practice had any effect on patient care. Additionally, the government did not allege that the providers billed for services that were unreasonable or medically unnecessary, and in fact acknowledged that the billing credentials at issue are “distinct from a provider’s degree or license to practice medicine.” As such, there was “no evidence in this case that any Doctors Care provider lacked a medical license or that patient care was compromised due to the conduct at issue.” That is, to say the least, an unusual statement in a healthcare fraud enforcement press release.

Generally speaking, FCA cases in the Medicare realm usually involve allegations of exaggerated or fraudulent billings, the provision of medically unnecessary, unreasonable or worthless care, patient harm and/or improper remuneration (kickbacks). While it is not extraordinary to see credentialing allegations in an FCA complaint, they often come after a series of allegations of the aforementioned type. And that makes sense because, in the authors’ experience serving as and working with prosecutors, Government enforcement attorneys do not generally view themselves as the “paperwork police” and are disinclined to build an FCA case solely around lapses in record-keeping and credentialing, especially where there are no allegations of any kickbacks, medically unnecessary care or patient harm. Cases involving record keeping and credentialing errors are often appropriately resolved through administrative or contract actions. That said, the errors here were systemic and the result of blatant and intentional misconduct over several years, thereby providing easy fodder for the Government to extract a large FCA settlement.

There are important lessons for healthcare providers to glean from this case. Most importantly that record keeping, licensing, certification, credentialing and other administrative errors can lead to FCA risks when allowed to fester. The evidence of a years-long scheme and an obvious intent to defraud in this case ultimately is what lead to the large settlement, as the Government placed much weight on the cheat sheets in particular. The U.S. Attorney’s Office stated that the Defendants should have resolved its credentialing problem or held the claims until it could find a temporary solution, instead of submitting claims containing falsehoods.

This case is a cautionary tale to healthcare providers that they must ensure, through appropriate management practices and compliance monitoring, that administrative requirements are satisfied. Additionally, they must ensure that accurate claims are submitted to the Federal Government and its intermediaries, even when they utilize third-party administrators for billing. More specifically, healthcare providers must ensure that their clinicians have the required credentials when submitting bills to Federal programs and that claims for reimbursement accurately reflect who provided the billed-for services. Failure to do so can lead to harsh sanctions in the form of treble damages and per-invoice penalties provided for in the FCA.