Earlier this month, we covered the Spectocor action which involved an executive and his company’s agreement to pay $10.56M of a $13.45M total settlement to resolve allegations involving medically unnecessary Medicare reimbursements. In another stark reminder that the Department of Justice has increased its focus on individual liability for corporate executives, as per the directive of the Yates Memo, the Government recently entered into to two more significant settlements with individuals accused of violating of the False Claims Act.
The first noteworthy settlement – involving The Hartford Dispensary – involved a total of $627,000 split between a corporation and its former CEO to resolve allegations that the CEO’s substance abuse treatment center made false representations and false certifications to the government that it had a medical director as required by federal and state law.
The second noteworthy settlement – involving Southeast Orthopedic Specialists – was settled by the agreement that a former CFO and COO would be personally accountable in the sum of $100,000 for allegations that he knew or should have known that medically unnecessary and unreasonable services were billed to federal healthcare programs. Commenting on this settlement, an OIG special agent announced that the government will “relentlessly seek to hold corporate officers who defraud the Medicare program personally accountable,” and that it will continue to “pursue company executives who misrepresent services to boost profits.”
The DOJ emphasizes that settlements like these are part of its increasing “focus on identifying specific individuals who participate or further financial fraud” as part of the government’s priority to hold individuals accountable for corporate malfeasance. We will continue to update this blog as the DOJ announces settlements in which individuals are personally being held financially responsible for alleged violations of the False Claims Act.