Florida Health Care Provider & Individual Physician to Pay $12 Million to Settle False Claims Act Allegations

March 23, 2010 - WASHINGTON – Dr. Todd J. Scarbrough and Melbourne Internal Medicine Associates P.A. (MIMA) have agreed to pay the United States $12 million to settle claims that the health care providers violated the False Claims Act by submitting false claims to Medicare and the military’s health care program - TRICARE, the Justice Department announced today.

MIMA provides health care services through a network of facilities located in Brevard County, Fla. Dr. Scarbrough was the medical director and practicing radiation oncologist at one of those facilities, the MIMA Cancer Center in Melbourne, Fla. In the complaint filed on Oct. 16, 2009, the United States alleged that, from the time of its inception through 2008, the MIMA Cancer Center, led by Dr. Scarbrough, improperly billed for certain radiation oncology services and caused false and fraudulent claims to be submitted to Medicare and TRICARE.

The United States’ investigation revealed that the MIMA Cancer Center had defrauded the federal health care programs by improperly inflating claims through various schemes specifically designed to cloak the fraudulent practices. In particular, the MIMA Cancer Center billed for services not supervised, duplicate and unnecessary services, services not rendered and upcoded services - a practice in which provider services are billed for higher procedure codes than were actually performed. The United States’ investigation found that MIMA executives had knowledge of a substantial number of the fraudulent billing practices at the facility, but had failed to stop the fraudulent billing.

"The Justice Department is committed to vigorously pursuing those who defraud Medicare," said Tony West, Assistant Attorney General of the Civil Division of the Department of Justice. "Health care providers who improperly charge for care, whether they be corporations or individual practitioners, will be held accountable."

The allegations resolved by today’s settlement were initiated by a whistleblower lawsuit filed under the False Claims Act, which allows a private party to file suit on behalf of the United States for fraud and to receive a share of the recovery. The whistleblower, Fred Fangman, former director of radiation oncology at MIMA Cancer Center, will receive $2.64 million of the settlement.

"Health care providers must be held accountable for their billing practices," said A. Brian Albritton, U.S. Attorney for the Middle District of Florida. "Those who submit false claims will be sought out and in the end they will pay dearly for their fraudulent claims."

Assistant Attorney General West noted that this settlement was the result of a coordinated effort among the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Middle District of Florida; the Office of Investigations for the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General; and the TRICARE Management Activity Office of Program Integrity and Office of General Counsel.

The lawsuit was captioned as United States ex rel. Fred Fangman v. Melbourne Internal Medicine Associates, P.A. and Dr. Todd J. Scarbrough, Civil Action No. 6:08-cv-1095-Orl-31DAB (M.D. Fla.).

This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion.