Surgical Care Affiliates and Orlando Center: Kidney Stone Procedures, Allegedly Without Kidney Stones

In the Surgical Care Affiliates Orlando lithotripsy settlement, the companies agreed to pay $3.4 million over allegations of unnecessary kidney stone procedures and per-procedure kickbacks. Some patients, the government alleged, did not have kidney stones.

The Department of Justice announced the settlement with Surgical Care Affiliates, LLC and Orlando Center for Outpatient Surgery, LP on June 28, 2021. The center was affiliated with Surgical Care Affiliates. A urologist performed extracorporeal shock-wave lithotripsy there, a procedure used to break up kidney stones. The government’s allegations reached both the need for that treatment and the money paid to have it performed at that facility.

The Alleged Per-Procedure Payments and Lithotripsy Claims

The Orlando Center allegedly paid the urologist for each lithotripsy procedure in exchange for performing his procedures there, violating the Anti-Kickback Statute. Surgical Care Affiliates vetted and approved the agreement, according to the government’s account. The procedures then generated claims billed to and paid by Medicare and TRICARE.

The unnecessary-procedure allegations covered claims submitted between January 2010 and April 2016. The government described two problems with the treatment: procedures that were not medically indicated, and procedures performed on patients who did not have kidney stones.

Under the alleged per-procedure arrangement, more lithotripsy meant more payments to the urologist and more bills to federal health care programs.

What the Whistleblower Case Changed

A private whistleblower brought the False Claims Act case, and the United States joined it. The settlement grew out of that qui tam case. The government announced that the whistleblower would receive a share of the companies’ settlement.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Urologist’s Estate Paid Separately

The urologist’s estate paid the United States $1.75 million in November 2020 to resolve claims arising from his alleged participation in the scheme, before the companies reached their larger settlement. He had died in March 2019. The Department of Justice reported the estate payment in its announcement of the later company settlement.

The estate payment addressed the physician’s alleged participation. The companies’ settlement addressed the businesses that allegedly paid for and approved the arrangement. The same alleged scheme reached beyond the person performing the procedures.

Why a Surgery Center’s Payment Arrangement Matters

The physician’s clinical decision and the surgery center’s business interests meet when the procedure is performed. The center provides the institutional setting and receives payment for the procedure. In Orlando, the alleged per-procedure agreement put a payment to the physician at that same point in the business.

In the medical-device business, the physician choosing treatment and the institution paying for equipment and billing for care may see different parts of the transaction. At the Orlando Center, that division matters because the government’s account joined a clinical decision to an agreement vetted by Surgical Care Affiliates. Someone working with the physician may understand why treatment was chosen. Someone handling the center’s agreements or payments may understand what business the arrangement was intended to bring in.

The 2020 Journal of Forensic and Investigative Accounting paper A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud describes allegations that Berkeley Heartlab paid physician groups kickbacks disguised as processing and handling fees to encourage referrals.

The paper’s example shows why the label on a payment tells only part of the story. What the payment bought matters. Applied to Orlando, the business question is what the center paid the urologist to do, while the clinical question is why the patient underwent lithotripsy. Reading the agreement alongside the treatment records connects the incentive to the care the government paid for.

What Kind of Proof Is Needed to Be a Whistleblower?

For an unnecessary lithotripsy case, the useful evidence connects the reason for treatment, the physician’s compensation, the approval of the arrangement and the resulting claims. We examine how those pieces fit the same procedures and patients. The Orlando allegations make each connection specific.

The clinical records show whether a patient had kidney stones and why lithotripsy was chosen. The payment agreement and records of payments show what the physician received for performing procedures at the center. The approval records show the company’s involvement. The claims show what the center asked Medicare or TRICARE to pay for.

Our work with a health care insider is to connect their knowledge to those decisions, including who approved them, so the case explains how the alleged conduct produced the bill.

The Pattern in Other Unnecessary-Procedure Cases

Other cases connect unnecessary procedures with financial incentives in different ways. Endoscopic Technologies, also called Estech, settled allegations in 2009 involving unnecessary invasive procedures, advice to bill at higher levels and kickbacks in the promotion of treatment for atrial fibrillation. There, promotion and billing advice formed part of the alleged path to the claim.

In the 2014 King’s Daughters Medical Center settlement, the government alleged unnecessary stents and catheterizations, false supporting records and excessive compensation to cardiologists. The allegations connected the hospital’s payment arrangements with the procedures and the records used to support them.

Orlando’s alleged arrangement was specific to lithotripsy performed at the center in exchange for per-procedure payments. Across these cases, the useful comparison is the relationship between compensation, the decision to perform a procedure and the claim that followed. An insider may understand that relationship from work that never involves submitting a bill.

You Know Why the Procedures Were Scheduled

If you saw unnecessary procedures or payments that brought patients to a surgery center, speak to one of our Whistleblower Experts about what you saw. We build the case with you around the treatment decisions, payments and approvals, and bring in healthcare fraud whistleblower lawyers who understand unnecessary-procedure claims. We stay beside you as your knowledge becomes a case for recovering the government’s money.