Care Plus and its Entities Agree to Pay $7.2 Million Against Anti-Kickback Allegations

Care Plus and its Entities Agree to Pay $7.2 Million Against Anti-Kickback Allegations

On April 13, 2022, Care Plus Management, LLC (“Care Plus”), its founders Paul D. Weir and John R. Morgan, MD, along with eighteen other anesthesia entities which were owned and operated by Care Plus, agreed to pay a whopping amount of $7.2 million as consideration to resolve allegations which claimed that they entered into kickback arrangements with referring physicians. It was alleged that Care Plus and its entities did so in exchange for the referral of the physicians’ patients for anesthesia services. Also, Weir and Morgan shared the revenue received from anesthesia services with the referring physicians and provided subsidies on drug supplies and equipment to the referring physicians’ outpatient surgical centers. United States ex rel. Douglas, et al., v. Care Plus Management, LLC, et al., No. 1:16-cv-4439-WRM (N.D. Ga. Apr 13, 2022)

It is seen that anesthesia providers usually depend on hospitals and outpatient surgery centers for their income. If an anesthesia provider is able to enter into an exclusive agreement with such centers, it is guaranteed a steady stream of patient referrals. Thus, anesthesia providers compete aggressively for these contracts.

The U.S. Government alleged that between the years 2012 and 2016, Weir and Morgan, through Care Plus, appeased physician owners of outpatient surgery centers to award these exclusive service agreements to them by offering partial ownership in the entities owned and operated by Care Plus. Under the terms of this agreement, the physician owners received compensation in the form of a portion of the revenue from the anesthesia services. The Government also alleged that Weir, Morgan, Care Plus, and its anesthesia companies subsidized the cost incurred by surgery centers for drugs, supplies, and equipment in order to induce the physician owners of those centers to grant exclusive anesthesia service agreements to Care Plus’s anesthesia companies. 

As per the Government allegations, the arrangements violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and caused the submission of false claims in violation of the False Claims Act, 31 U.S.C. § 3729, et seq. The Anti-Kickback Statute is a criminal statute that prohibits an exchange or offers to exchange of anything of value, in consideration to the referral of business reimbursable by federal health care programs. While under the False Claims act, a private citizen may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government.

The original complaint filed in 2016 included more than fifty medical entities operating across several states and numerous unnamed individuals. However, the U.S. Government and the State of Georgia intervened only against the Care Plus Parties. This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Department of Health and Human Services Office of Inspector General, and the Georgia Attorney General’s Office Medicaid Fraud Control Unit. The settlement agreed upon by the parties resolved a lawsuit originally filed in the U.S. District Court for the Northern District of Georgia under the qui tam or whistleblower provisions of the False Claims Act.

Research and Writing By: Team Draft n Craft

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