American Family Care Inc., a well-known network of walk-in medical clinics, has agreed to a settlement of $1.2 million with the government. This resolution addresses allegations under the False Claims Act, stating that American Family Care knowingly submitted claims to Medicare for outpatient office visits at inflated rates. The announcement was made by the Department of Justice.
Headquartered in Birmingham, Alabama, American Family Care operates numerous clinics across Alabama, Tennessee, and Georgia. The core of the issue revolves around how these clinics billed Medicare for their services.
Assistant Attorney General for the Justice Department’s Civil Division, Stuart F. Delery, emphasized the seriousness of overcharging the government. “Mischarging the government for office visits wastes valuable government resources that could be used to care for other patient needs,” he stated. He further added, “At a time of increasing concern about the cost of medical care, it is especially important to ensure that health care providers are not overbilling the government by improperly inflating their claims.”
The case centers on the Evaluation and Management (E&M) codes used for billing Medicare. These codes, as guided by the Centers for Medicare and Medicaid Services, categorize office visits into five levels, from basic (level 1) to most complex (level 5). Reimbursement from Medicare increases with each level. The government contended that American Family Care improperly selected higher level E&M codes than warranted by the services actually provided. This practice, it was alleged, was a deliberate attempt to boost their Medicare reimbursements.
Joyce White Vance, U.S. Attorney for the Northern District of Alabama, underscored the importance of the False Claims Act in combating fraud. “The False Claims Act is a critical tool for weeding out fraud and protecting the taxpayers,” Vance said. “My office will continue to return funds, like the $1.2 million in this case, to the taxpayers by proceeding against those who abuse our public health programs.”
Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services, echoed these sentiments. “Billing the government for services not provided as claimed cheats both taxpayers and patients,” Jackson stated. “We will pursue aggressively providers like American Family Care alleged to have improperly maximized reimbursements.”
The settlement originated from a lawsuit filed by Anita C. Salters, a former American Family Care employee, acting as a whistleblower under the False Claims Act. This act allows private individuals to file lawsuits on behalf of the government regarding false claims and to receive a portion of the recovered funds. Ms. Salters’ share of the settlement is yet to be determined.
This case is part of the government’s broader effort to combat health care fraud, highlighted by the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, launched in 2009. HEAT aims to reduce Medicare and Medicaid fraud through enhanced cooperation between the Department of Justice and the Department of Health and Human Services. The False Claims Act is a key instrument in this fight. Since 2009, the Justice Department has recovered over $19 billion through False Claims Act cases, with a significant $13.4 billion from cases involving federal health care program fraud.
The American Family Care settlement involved collaboration between the U.S. Attorney’s Office for the Northern District of Alabama, the Department of Justice’s Civil Division, Commercial Litigation Branch, the Office of Inspector General of the U.S. Department of Health and Human Services, and the Federal Bureau of Investigation.
The case is formally known as United States ex rel. Anita C. Salters v. American Family Care Inc. (N.D. Ala.). It is important to note that the claims resolved by this settlement are allegations, and there has been no formal determination of liability against American Family Care.
