American Family Care Inc., a network of urgent care clinics headquartered in Birmingham, Alabama, has agreed to pay $1.2 million to the government to resolve allegations of Medicare fraud. The settlement, announced by the Department of Justice, addresses claims that American Family Care knowingly submitted inflated bills to Medicare for outpatient office visits.
The government alleged that American Family Care, a prominent healthcare provider with locations across Alabama, Tennessee, and Georgia, improperly billed Medicare by using higher-level service codes than warranted. These codes, known as Evaluation and Management (E&M) codes, are used by healthcare providers to bill Medicare for office visits. They range from Level 1 (basic) to Level 5 (most complex), with higher levels resulting in greater reimbursement. The Justice Department contended that American Family Care systematically selected codes suggesting more complex and resource-intensive visits than were actually provided to patients. This practice allegedly led to artificially inflated payments from Medicare.
“Mischarging the government for office visits diverts critical healthcare resources,” stated Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division. “At a time when healthcare costs are a major concern, it is crucial to ensure that providers are billing accurately and not improperly maximizing their claims.”
U.S. Attorney Joyce White Vance for the Northern District of Alabama emphasized the importance of the False Claims Act in combating healthcare fraud. “The False Claims Act is vital for uncovering fraud and protecting taxpayer funds,” Vance said. “Our office is committed to recovering funds for taxpayers by pursuing those who misuse public health programs, as demonstrated by this $1.2 million settlement.”
Derrick L. Jackson, Special Agent in Charge at the Office of Inspector General for the U.S. Department of Health and Human Services, added, “Billing for services not rendered as claimed is detrimental to both taxpayers and patients. We will aggressively investigate providers like American Family Care who are alleged to have sought improper reimbursement increases.”
This settlement originated from a whistleblower lawsuit filed by Anita C. Salters, a former American Family Care employee. Under the False Claims Act, private individuals can file lawsuits on behalf of the government and receive a portion of any 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 healthcare fraud through the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative. Since 2009, HEAT has been instrumental in recovering over $19 billion through False Claims Act cases, with a significant portion, $13.4 billion, specifically from cases involving fraud against federal health programs.
The American Family Care settlement was a collaborative effort involving the U.S. Attorney’s Office for the Northern District of Alabama, the Department of Justice’s Civil Division, 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., filed in the Northern District of Alabama. It is important to note that the claims resolved by this settlement are allegations, and there has been no admission of liability by American Family Care.
