Osteo Relief Institutes: The 2019 $7.1 Million Settlement Over Knee Care

Seven former Osteo Relief Institutes clinics and their owners agreed to pay more than $7.1 million in the 2019 settlement over allegations that they knowingly billed Medicare for unnecessary knee braces and injections. The case reached both the equipment supplied to patients and the treatment administered in the clinic. For an insider who knew how those decisions were made, the important question was why the patient received either one.

The Department of Justice announced the settlement on October 18, 2019. A government analysis of Medicare claims data prompted the investigation that identified the allegations. The settlement also resolved a whistleblower’s qui tam lawsuit, which the government joined in part.

What the Clinics Allegedly Billed Medicare For

The government alleged that the former Osteo Relief clinics billed Medicare for medically unnecessary viscosupplementation injections and custom knee braces. These were different products and different decisions about patient care, brought together in one civil settlement.

Knee Injections Without Clinical Support

The injection allegations reached beyond whether a patient needed the initial treatment. The government alleged that the clinics administered injections to patients who did not need them, used multiple brands successively without clinical support, and used discounted viscosupplements reimported from foreign countries.

Those are connections we examine with an insider who knows the treatment decisions, purchasing records or claims.

The successive-brand allegation is particularly concrete. According to the government, patients received one brand after another without clinical support. A different product name on the next claim did not supply the missing reason to give the next injection.

Custom Knee Braces Patients Did Not Need

The brace allegation was separate: the government said the clinics provided unnecessary custom knee braces to patients. The alleged problem was the decision to supply the device and bill Medicare for it.

How Medicare Claims Data Led to the Investigation

The government investigation arose from a critical analysis of Medicare claims data, according to the settlement announcement. The Justice Department said that investigation identified the allegations resolved by the agreement. The U.S. Attorney’s Offices for the District of Minnesota and the Eastern District of Kentucky handled the case with the Justice Department’s Civil Division, the HHS Office of Inspector General and the FBI, in what the Minnesota office called a nationwide investigation.

The whistleblower case was another part of the resolution. A private individual had brought a qui tam lawsuit against the clinics and their owners under the False Claims Act. The government joined part of that action and took over that part. The announcement also provided for a whistleblower reward.

A claims pattern and an explanation from inside the clinic answer different questions. We look at both: what Medicare was billed for, and what the people making the treatment and purchasing decisions knew. That connection is especially useful when the allegation concerns the clinical reason for giving another injection or ordering a brace.

What the Seven Clinics Agreed to Pay

The clinics and their owners in Phoenix, Arizona; San Diego, California; Lexington, Kentucky; Wall Township, New Jersey; Dallas, Texas; and San Antonio, Texas agreed collectively to pay the United States $6 million. The clinic in Colorado Springs, Colorado agreed to pay approximately $1.13 million to resolve its own role in the false claims for injections and braces.

The Brace Manufacturer’s Sales Arrangements

In a separate 2022 settlement, brace manufacturer Vision Quest Industries resolved allegations that it caused Osteo Relief clinics to bill Medicare for knee braces tainted by kickbacks.

What the Corporate Integrity Agreement Required

The settling Osteo Relief clinics entered a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General alongside the civil settlement. The Justice Department described comprehensive compliance controls and annual reviews of clinic claims by an Independent Review Organization. The agreement itself, signed in September 2019, reached the clinics’ owners, officers and employees and the contractors who furnished patient care or handled billing or coding for them, and it required at least annual training for all of them, including on the Anti-Kickback Statute. It also bound five other clinic companies, in which one of the settling owners held an ownership or control interest, that were not parties to the settlement.

An OIG official described the agreement as a five-year arrangement intended to prevent the alleged behavior from recurring. The operational consequence reached past the settlement payment: claims would face recurring review by an outside organization. Each year the reviewer was to choose 10 clinics at random and test a random sample of at least 150 paid Medicare and Medicaid claims, 15 from each, for whether the care was medically necessary and documented and the claim correctly coded and paid. A claim the clinics could not document counted as an error, its whole payment treated as an overpayment, and the overpayments found had to be repaid within 60 days. That is the question the government’s case turned on: whether the clinic’s own records supported the injection or the brace.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the Osteo Relief case, the Justice Department announced a payment to the whistleblower whose lawsuit the settlement resolved.

The Clinical Decision Behind the Claim

The Osteo Relief allegations followed the patient from the treatment choice to the injection product and the custom brace. The common question was medical need. On the government’s account, patients received injections and braces they did not need, and the clinics billed Medicare for them. Patients bore the risk of unnecessary care while taxpayers faced the bill.

For an insider, the useful detail is often the reason a decision was made. Someone who knew why another injection brand was selected may see a different part of the problem from someone who handled brace orders or purchased the drugs. We work with that specific knowledge and connect it to the claims for payment.

You Know Why the Clinic Ordered It

If you saw braces or successive injections ordered without a clinical reason, talk with our whistleblower experts about the billing behind them. We build your strongest Medicare whistleblower case with you, bring in healthcare fraud whistleblower lawyers who understand medical-necessity claims, and stay beside you through the pursuit of a recovery.