Alaska Neurology Center LLC and Its Owner to Pay $2 Million to Settle False Claims Act Allegations Regarding Fraudulent Medical Billing

Anchorage, Alaska – U.S. Attorney Bryan Schroder announced today that Anchorage-based Alaska Neurology Center LLC and its owner, Franklin Ellenson, M.D., have agreed to pay $2 million to resolve False Claims Act allegations that the medical practice knowingly submitted false billing claims to federal healthcare programs.  Contemporaneous with the civil settlement, Alaska Neurology Center LLC and Dr. Ellenson agreed to a three-year Integrity Agreement with the U.S. Department of Health and Human Services.

“Healthcare providers who submit false bills hurt honest providers and the nation’s taxpayers,” said U.S. Attorney Schroder.  “I commend the collaborative efforts of our federal partners to use all available remedies, both civil and criminal, to address waste and abuse in the healthcare market.  I am particularly pleased that the public healthcare programs will be made whole, which will help ensure their continued vitality for future generations.”

The settlement resolves allegations that, from March 2013 through June 2018, Alaska Neurology Center LLC engaged in multiple fraudulent billing schemes, including:  (1) submitting claims with false dates of service in order to obtain reimbursement beyond program caps, (2) submitting claims for infusion services provided by an unqualified medical assistant, (3) submitting claims for physical therapy when the service provided was non-reimbursable massage therapy, (4) submitting claims using multiple, unbundled billing codes, rather than a single required billing code, to obtain overpayment for the service, (5) submitting claims with false names of performing and/or referring medical providers, and (6) re-submitting claims with false service or diagnosis information, and without consulting a medical provider, after an original claim was rejected.

The allegations stem from a lawsuit filed under the whistleblower, or qui tam, provision of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery.  The whistleblower will receive approximately $380,000 of the settlement.

The government’s pursuit of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the U.S. Department of Health and Human Services at 1-800-HHS-TIPS (800-447-8477) or https://oig.hhs.gov/fraud/report-fraud.

The settlement was the result of an investigation conducted by the Civil Division of the U.S. Attorney’s Office for the District of Alaska, in conjunction with the U.S. Department of Health and Human Services Office of Inspector General.  Investigative support was also provided by the Defense Health Agency, U.S. Office of Personnel Management, U.S. Department of Veterans Affairs, and the Federal Bureau of Investigation.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit is captioned United States of America ex rel. Thomas Fidler v. Alaska Neurology Clinic, LLC [sic], et al., No. 3:18-cv-00057-HRH (D. Alaska).