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EEG testing and private investment companies pay $15.3 million to resolve kickback and false billing allegations

Press releases may be edited for formatting or style | July 22, 2021 Business Affairs Insurance

“This settlement demonstrates our commitment to safeguarding the Federal health care programs from fraud,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General of the U.S. Office of Personnel Management Office of Inspector General (OPM-OIG). “I would like to thank our staff, law enforcement partners and the Department of Justice for their efforts to protect the Federal Employees Health Benefits Program from those who would seek to defraud the program through improper and illegal billing practices.”

Alliance provides ambulatory EEG testing services for patients referred by physicians and other health care providers to diagnose certain neurological conditions. The United States alleged that Alliance induced physicians to order the company’s EEG testing by providing kickbacks in the form of free EEG test-interpretation reports, thereby enabling primary care physicians who were not neurologists to bill the government as if they had interpreted the tests. The government also alleged that Alliance used an inaccurate billing code for certain EEG testing to generate higher reimbursements and billed for a specialized digital analysis that it did not actually perform. The United States alleged that Ancor learned of the kickbacks based on due diligence it performed prior to investing in Alliance and then caused false claims by allowing that conduct to continue once it entered into an agreement to manage Alliance.

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Under the terms of the settlement, Alliance will pay $13,022,356 and Ancor will pay $1,780,349 to the federal government to resolve their liability under the False Claims Act. In addition, Alliance will pay $477,643 and Ancor will pay $64,369 to state Medicaid programs. Alliance is obligated to pay additional amounts if certain financial contingencies occur within the next five years and forego any claim to over $390,000 in suspended payments that it would otherwise be owed by Medicare.

In connection with the settlement, Alliance entered into a five-year Corporate Integrity Agreement with HHS-OIG, setting forth requirements for future compliance.

The settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act in six actions. Under the Act’s qui tam provisions, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendant. The qui tam actions subject to the settlement are all pending in the Southern District of Texas and are captioned United States ex rel. Mandalapu, et al. v. Alliance Family of Companies, Inc., et al., No. 4:17-cv-00740; United States ex rel. Fuller v. Respiratory Sleep Solutions, et al., No. 4:17-cv-01197; United States ex rel. Calcanis v. Alliance Family of Companies, Inc., et al., No. 4:19-cv-1497; United States, et al. ex rel. Jane Doe v. Alliance Family of Companies, LLC, et al., No. 4:19-cv-1213; United States, et al. ex rel. McKay v. Alliance Family of Companies, LLC, et al., No. 4:18-cv-1949; and United States, et al. ex rel. Krasnov v. Alliance Family of Companies, LLC, et al., No. 4:19-cv-4886. Relators Mandalapu and Chava will receive $2,962,850 of the federal settlement proceeds as their share of the government’s recovery, plus a share of any additional recoveries should the financial contingencies occur.

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