Greene LLP Whistleblower Secures $6.5 Million False Claims Act Settlement With Carolinas Healthcare System Over Upcoding Allegations

Greene LLP attorneys announce the resolution of False Claims Act claims by Mark McGuire, a former laboratory director with the Charlotte-Mecklenburg Hospital Authority, Inc., a chain of North Carolina hospitals doing business as Carolinas Healthcare System (CHS). While with CHS, McGuire oversaw all of the operations of its laboratory, and protested against billing practices that resulted in false claims for payment to the government. Under the federal False Claims Act, McGuire filed a law suit on behalf of the federal and North Carolina governments, alleging that upcoding at CHS resulted in thousands of falsely inflated claims to Medicare and Medicaid. The $6.5 million settlement reached by the United States with CHS resolves McGuire’s allegations that CHS upcoded when submitting claims for urine drug testing services.

Federal health insurance programs reimburse for laboratory testing based in part on the complexity of testing. Effective January 1, 2011, the Centers for Medicare and Medicaid Services introduced a reimbursement code for carefully defined urine drug tests of moderate complexity, to be used when utilizing “a moderately complex reader device.” McGuire found that CHS routinely billed Medicare and Medicaid under a high complexity reimbursement code for tests performed with its Beckman Coulter UniCel DxC 800 Synchron Systems, classified by its manufacturer as a moderate complexity reader device. Tests done on this machine should never be billed under a high complexity code, alleged McGuire, but by doing so, CHS increased its reimbursements by approximately $80 per test.

Before filing the False Claims Act suit, McGuire made efforts to stop the CHS billing practices internally, employing a compliance “HelpLine” and speaking directly with CHS officials. “This case is a great example of how the False Claims Act can get things done when other methods do not,” said Thomas M. Greene, who along with Michael Tabb and Tucker Greene represented McGuire in the law suit. “McGuire knew he was right—Carolinas Healthcare did not own the lab equipment needed to justify the high complexity reimbursement codes. He feels vindicated by this settlement.” W. Thompson Comerford of Comerford & Britt, LLP also represented McGuire in the suit, which was resolved through the instrumental efforts of Assistant United States Attorney Jonathan Ferry and others at the U.S. Attorney’s Office for the Western District of North Carolina.

The False Claims Act provides that when a whistleblower successfully files suit and the government intervenes, that whistleblower is entitled to between 15% and 25% of any resulting recovery. Pursuant to the terms of settlement, McGuire will receive $1,365,000 of the government’s settlement. “We are pleased with a 21% relator share in this case, which rewards McGuire for the professional nature of his conduct in this straightforward upcoding case,” said Greene. McGuire also received $30,000 directly from CHS in satisfaction of his allegations that the company retaliated against him because of his efforts to stop improper billing practices. Pursuant to the statute, CHS will also pay McGuire’s attorneys’ fees for the prosecution of the False Claims Act case. The case, United States ex rel. Mark McGuire v. The Charlotte-Mecklenburg Hospital Authority, et al., was filed in federal court in the Western District of North Carolina, Case No. 3:15-cv-147.

Greene LLP is a Boston complex civil litigation firm that specializes in False Claims Act litigation, employing a low-volume, high-attention approach. Each of the firm’s partners have over twenty years of experience in whistleblower litigation, pioneering innovative theories of recovery. Greene LLP cases have resulted in over $1.2 billion in government recoveries, including nearly $500 million for claims for which the government declined to intervene.

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