United States reaches a $1.25 Million Settlement with South Carolina Family Practice Clinics for Billing Unnecessary Services to Federal Health Programs

Columbia, South Carolina---- Acting United States Attorney M. Rhett DeHart announced today that Colonial Family Practice, LLC, a physician-owned primary and urgent care practice with multiple clinics in South Carolina, has agreed to a $1.25 million settlement to resolve allegations that it violated the False Claims Act by billing Medicare, Medicaid, and TRICARE for medically unnecessary services.

Specifically, the United States alleged that Colonial Family Practice filed claims for medically unnecessary nuclear stress tests ordered by Dr. Clay Lowder and Dr. David Whaley between February 22, 2012, and November 26, 2019. Further, the United States alleged the practice systematically billed for unnecessary Cystatin-C laboratory tests-a test to detect kidney dysfunction that is only payable in a narrow set of patients. Colonial Family Practice allegedly added this test to a panel run on most of its patients between August 13, 2013, and November 29, 2019.

The allegations settled arose from two whistleblower lawsuits-one by a Physician Assistant formerly employed by Colonial and the other by a former clinical manager at the practice.

In United States ex rel. Debi Coker v. Colonial Family Practice LLC, et al., Civ. No. 3:18-cv-00800-JMC, the former clinical manager alleged that between February 2012 and November 2019 physicians at the practice falsified symptoms in medical records to support unnecessary EKGs, laboratory orders, and radiology services.

In United States ex rel. James Fields v. Colonial Family Practice, et al., Civ. No. 3:19-cv-02703-JMC, the Physician Assistant alleged that, between August 2013 and November 2019, Colonial created a protocol to add a Cystatin-C laboratory test to its Basic Metabolic Panel, which led to systematic billing for medically unnecessary Cystatin-C tests.

"The United States Attorney's Office will continue its effort to ensure healthcare providers doing business with the federal government do so with competent care within the full letter of the law," said Acting U.S. Attorney DeHart. "By doing so, we not only will ensure the rule of law is followed but also ensure tax dollars are protected."

"False and inappropriate healthcare billing erodes public confidence in the healthcare system, subjects patients to unnecessary tests and procedures, and increases the cost of healthcare for active duty service members, retirees, and their families," said Special Agent in Charge Christopher Dillard, Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Mid-Atlantic Field Office. "DCIS and its law enforcement partners will continue targeting fraud waste and abuse of the TRICARE program and hold wrongdoers accountable."

The matter was investigated by the Department of Defense's Defense Health Agency, the South Carolina Attorney General's Medicaid Fraud Enforcement Unit, and Assistant United States Attorneys Beth Warren and Nancy Cote.

The litigation and settlement of this matter illustrates the government's emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The claims resolved by this settlement are allegations only. Colonial Family Practice, LLC does not admit wrongdoing or liability.

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