Topic:

The purpose of this statement is to provide a transparent account of the False Claims Act allegations made by a former NextCare employee in United States of America, et al. v. NextCare, Inc., et al.

Background:

In 2009, NextCare received notice of an investigation regarding a whistle-blower claim. At the time NextCare, a chain of urgent care facilities, was operating locations in Arizona, Colorado, Texas, North Carolina, Ohio and Virginia. I was the founder, CEO and Chairman of the Board of NextCare.

A former employee of NextCare filed several counts against the company for allegedly submitting false medical claims to government payors for unnecessary allergy, H1N1 virus (flu) and respiratory panel tests. The civil lawsuit included allegations that NextCare engaged in a practice known as upcoding (i.e. using a medical billing code for a more expensive service than was performed). The Department of Justice joined in the civil lawsuit.

In 2011, a second, former employee, separately and independently filed a Qui Tam suit alleging the same facts as the initial whistleblower.

Articles from the press included unsubstantiated allegations that weren’t mentioned in the civil lawsuit. The articles alluded to NextCare dismissing employees for not meeting allergy, H1N1 virus and respiratory panel test metrics (none of which actually happened).

The first civil lawsuit was settled by NextCare agreeing to pay $10 million to the United States, so that the Department of Justice would not initiate criminal prosecution against NextCare. $1.614 million went to the first former employee to file.

The case pursued by the individual who was second to file was dismissed with prejudice in 2014.

Facts:

Initially the Board was in favor of defending the case brought by the Department of Justice.  However, approximately six months later the Board voted to “Pay the DoJ to go away because no one ever wins against them.”  I was in strong opposition to the NextCare Board of Directors’ decision to settle the lawsuit (i.e. pay the $10 million). Instead of engaging in a shareholder battle, in a time when I held 47.6% of the company, I took a severance package and left NextCare.

As an attorney and Physician, I knew that legally and medically we had done nothing wrong. However, the board of directors was convinced that paying the fine was easier and ultimately less costly than fighting. From my vantage, I knew that a long, protracted share-holder battle was not in NextCare’s best interest.

There are three key allegations that I’m frequently asked about and would like to address.

Upcoding, False Claims and Unnecessary Testing:

During my tenure at NextCare, we always aimed to hire providers who were among the best and most reliable in their profession. Our providers were given the ultimate authority and responsibility on which tests to perform and bill.  We considered our providers the “gold standard” and they had ultimate decision making.

Prior to instituting allergy and Diatherix H1N1 programs, NextCare vetted the process thoroughly via our compliance attorney, medical advisory board, internal compliance officer, Corporate Counsel, President, and Board of Directors.  The additions of these services were not taken lightly, nor were they done haphazardly.  In fact, several other groups were also using the Diatherix H1N1 test, such as The Cleveland Clinic and Concentra.

We were not financially motivated to perform unnecessary tests or falsify claims. However, we were motivated to code and bill appropriately and to perform tests that were medically indicated, provided patients understood and signed their informed consent and disclosure document.

In addition, I wasn’t personally financially motivated or compensated to encourage, support or endorse unnecessary testing, nor were our providers.

Emails:

There are a multitude of news sources quoting emails that I distributed to the NextCare team. I hold honesty and transparency in high regard, and have never denied the content or issuance of those emails. In fact, I openly admit to sending a daily email out to our staff of 1,000 employees – generally, these were encouraging, supporting or congratulatory in nature, usually giving employees or clinics a shout-out.

With the benefit of hindsight, I understand how the Department of Justice and news sources misconstrued the snippets they took from my e-mails which were used as evidence. I certainly acknowledge my enthusiasm, but strongly believe that when read in context, the NextCare team didn’t misinterpret my communications.

The media also propagated that we had a quota or sales goal for allergy, H1N1 virus and respiratory panel tests. This was not the case.  Based on data from the World Health Organization and the American Academy of Allergy Asthma and Immunology we were dramatically under testing patients. We tested between 1% and 3% of the patients who presented to the urgent care, although more than 25% presented with one of the above issues, either as a primary /chief complaint or a secondary complaint. Based upon these statistics, we believed that at minimum, the standard of care for testing a high-risk population should be at least 10%, of the more than 25% of patients, who fell into a high-risk category and who presented themselves to our centers.

Employee Dismissal:

During my tenure at NextCare we had evaluations and scorecards to measure employees on quality of service and productivity. However, allergy testing wasn’t a metric of the provider evaluation.

Providers were also not awarded bonuses based upon ancillary testing (lab or radiology) or dispensing, proving there was no provider incentive to push testing.  Most importantly, no one was ever terminated for not administering tests.

In Conclusion:

During the two-year investigation, the Department of Justice didn’t permit my testimony or evidence of medical necessity. At the time I felt, and still feel, that based upon our compliance committee, our opinion letter, and our medical direction committee, that everything NextCare did for its patients was medically indicated and justified.

The patients’ tests were only performed with their informed consent, and under the direction of a licensed medical provider.

Notably, the civil lawsuit was permanently dismissed and the United States never pursued a separate civil lawsuit or criminal prosecution against me. While I understand the decision by the NextCare Board of Directors to pay the $10 million settlement, it was not a decision I could or did support.

Despite the fact that I wasn’t forcefully or suddenly removed from office, and wasn’t charged with any wrong doing my reputation was brought into question. I hope that the above information will resolve those questions, but I also welcome and encourage any communication for further clarification.