A physician and his affiliated companies have agreed to pay $45 million to resolve allegations that they violated the False Claims Act by knowingly causing the submission of claims to Medicare for medically unnecessary surgical procedures. The government alleged that the entities routinely billed for more lucrative surgical services when only routine, non-surgical wound management had been performed, and also submitted claims for evaluation and management services that were not billable under Medicare coverage and coding rules.
The companies involved are among the nation’s largest providers of bedside specialty wound care for patients in nursing homes and skilled nursing facilities. In April 2025, the United States filed a lawsuit alleging that the defendants engaged in a nationwide scheme to bill Medicare for surgical excisional debridement procedures that were either not medically necessary or had not been performed at all.
According to the government’s complaint, the organization pressured and trained its physicians—while also offering financial incentives—to perform debridement procedures during as many patient visits as possible, regardless of clinical need. The complaint further alleged that the electronic health record and billing systems were programmed to ensure that Medicare was always billed for the higher-reimbursed surgical excisional procedure, even when a non-surgical service was provided, and that the systems created false documentation to support those claims. The government alleged that the scheme was directed by the physician-owner and carried out by senior management.
Under the settlement, the companies will enter into a five-year Corporate Integrity Agreement (CIA) with the Office of Inspector General of the Department of Health and Human Services. The CIA requires the development of a comprehensive compliance program, implementation of a risk-assessment process, and retention of an independent review organization to evaluate claims and health information technology systems. The agreement also includes ongoing monitoring obligations and requires annual certifications of compliance from company executives and owners.
“Billing Medicare for medically unnecessary procedures and manipulating documentation to maximize profits not only defrauds taxpayers — it puts vulnerable patients at risk,” said Deputy Inspector General for Investigations Christian J. Schrank at the US Department of Health and Human Services, Office of Inspector General (HHS-OIG). “This settlement sends a clear message: those who exploit federal healthcare programs for personal gain will face serious consequences. The Corporate Integrity Agreement ensures continued oversight and serves as a powerful deterrent against future misconduct.”
Compliance Perspective
Issue
Healthcare providers are required to ensure that all services billed to Medicare or Medicaid are medically necessary, accurately documented, and correctly coded. Submitting claims for services that were not performed, were not medically necessary, or were improperly documented can result in significant legal and financial consequences under the False Claims Act. Each billed service counts as a separate claim, making penalties potentially substantial. Facilities must maintain strong compliance practices, clear reporting pathways, and an environment that supports nonretaliatory reporting of concerns related to billing and documentation.
Discussion Points
- Review your facility’s policies and procedures governing medical documentation, billing accuracy, and verification of medical necessity. Ensure they clearly address steps for preventing and reporting potential false claims. Facilities may also consider collaborating with an external consultant to assess whether their existing policies reflect current best practices and adequately address areas of potential vulnerability.
- All staff should receive training upon hire and at least annually on the facility’s compliance and ethics policies, including what constitutes a valid claim, the requirements for medical necessity, and the importance of accurate clinical documentation. Staff responsible for preparing, reviewing, or submitting Medicare claims should receive targeted instruction to ensure they understand the processes that support billing accuracy. Med-Net Academy offers the course Understanding and Using the Medicare Triple Check Process, which helps ensure accuracy of billing for skilled services, prevents the submission of false claims, reduces adjusted or denied claims, confirms that residents receive the benefits to which they are entitled, and reinforces the importance of aligning clinical documentation with financial data.
- Conduct periodic audits to confirm that documentation supports the services billed, that coding accurately reflects the level of service provided, and that claims submitted to Medicare or Medicaid meet regulatory requirements. Audits should include review of clinical documentation, billing workflows, and any supporting records. Many facilities also find value in engaging an external reviewer to provide an independent assessment of their processes, identify emerging risk areas, and offer recommendations for improvement.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*