Whistleblower Complaint Filed in Middle District of Florida Against Healogics, Inc. is Unsealed; Hundreds of Hospitals Also Sued

Friday, November 6, 2015
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The United States District Court for the Middle District of Florida recently unsealed a complaint filed by qui tam relators (whistleblowers) against Healogics, Inc. (Healogics) and hundreds of hospitals spanning the country alleging violations of the False Claims Act (FCA).  The lawsuit stems from allegations of a scheme to improperly bill Medicare for costly and unnecessary medical procedures in violation of the FCA, including the performance of unnecessary hyperbaric oxygen treatments and up-coding.

Click here to read the full amended complaint. 

The Gravity of the Alleged Scheme.

The egregious nature of this alleged scheme lies in the fact that Healogics is a national company that engages in business with more than 600 hospitals across the country and has reportedly used its status as a "gatekeeper."  Healogics purportedly required hospitals doing business with them to meet certain financial benchmarks to continue doing business together.  It is reported that Healogics only "rewarded" those willing to participate in its alleged fraudulent scheme and "punished" those unwilling by reducing or altogether eliminating the assignment of patients to those not amenable to its billing practices. 

The "Healogics Way" or the Highway!

The financial benchmarks for services reportedly put into place by Healogics was done so with the alleged intent to maximize billing for each wound care center.  The complaint further alleges that the benchmarks created financial incentives to up-code for wound care services that were not medically necessary.  Hyperbaric oxygen treatments were pinpointed among these medically unnecessary procedures.

Hyperbaric oxygen treatments are generally utilized for decompression sickness but can also be useful in treating traumatic wounds and various skin ulcers.  Reportedly, physicians of hospitals contracting with Healogics, were doubling the amount of necessary hyperbaric oxygen treatments performed on Medicare patients as a result of the alleged up-coding scheme.

Not meeting these financial benchmarks would allegedly result in a hospital being dropped as a client of Healogics.  

While the complaint does not state that hospitals were required by contract to follow the alleged benchmark scheme, it does state that the hospitals were "informed by Healogics that [they] could expect certain profits from the wound care centers when the facilities [were] operated the 'Healogics Way.'" 

False Claims Act Violations Will Not be Taken Lightly.

We have seen several health care facilities settle with the DOJ for significant dollar amounts in just the last month, including:

(1)    Tuomey Healthcare Systems, Inc. for $72.4 million-click here to read more;

(2)    Novartis Pharmaceuticals Corp. for $390 million-click here to read more; and

(3)    Millennium Health for $256 million-click here to read more.

Furthermore, with the recent issuance of a directive ("Yates memo") by the Department of Justice (DOJ), individuals of corporations suspected of criminal culpability in health care fraud or abuse schemes are forewarned that criminal charges may ensue.  The "Yates memo" is explicit about the DOJ's increased efforts in deterring fraudulent activity and holding those accountable who seek to corrupt the integrity of federal health care programs.  

Former Warner Chilcott President, three former district managers of the same pharmaceutical company and one physician doing business with them, were all issued indictments quickly following the release of the "Yates memo" for their alleged involvement in a health care fraud scheme within the corporation.  These recent indictments beg the question of whether the DOJ is already aware of several criminal cases in the loom it wishes to pursue as exemplary (so-to-speak) to back-up its new policy announcement, this case being among them.  

It is to be expected then that we have not seen the end of the DOJ's steadfast pursuit of FCA cases.  Certainly, we have not seen the end of this particular FCA case.


Have you been suspected of health care fraud or abuse, or do you currently suspect your employer or corporation of engaging in health care fraud or abuse?

Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm also represent health care professionals and health facilities in qui tam or whistleblower cases both in defending such claims and in bringing such claims. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters. We have represented doctors, nurses and others as relators in bringing qui tam or whistleblower cases, as well.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.


Kass, Dani.  "Healogics Whistleblowers Dump Medicare FCA Suit."  Law360.  Portfolio Media, Inc.: 9 Oct. 2015.  Web.  5 Nov. 2015.

Krieger, Drew.  "Whistleblower Suit Against Healogics, Inc. Still Pending Amid FCA Violation Allegations."  American Health Lawyers Association.  30 Oct. 2015.  Web.  2 Nov. 2015.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida area.  www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

Keywords: False Claims Act attorney, Anti-Kickback Statute attorney, whistleblower lawyer, FCA violations, fraud detection, financial benchmarks for physicians, financial incentives to up-code billing, medically unnecessary procedures, Yates memo, health law attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, qui tam attorney, medical necessity of testing, physician remunerations, AKS defense lawyer, FCA defense lawyer, Department of Justice defense attorney, DOJ settlement lawyer, illegal remunerations, federal health care programs, financial inducements, Stark Law attorney, Stark Law violations, qui tam lawyer, whistleblower attorney, FCA settlement, health care law attorney, health care fraud scheme, The Health Law Firm reviews

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2015 The Health Law Firm. All rights reserved.

Like this blog? Add your public comments:

Items in bold indicate required information.