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Pain clinic agrees to pay $1.78 million to settle whistleblower lawsuit

Ross Feller Casey, LLP, recently announced that the Atlantic Spine & Joint Institute and its owners, Robert C. McGrath, Sr., D.O., and Robert C. McGrath, Jr., have agreed to pay $1.78 million to settle a whistleblower lawsuit alleging they billed Medicare for procedures that were not medically necessary or were not actually performed. 

The father and son also pleaded guilty to charges that they conspired to commit healthcare fraud. Sentencing for both defendants is scheduled for September.

The agreement settles a civil lawsuit filed under the federal False Claims Act by a former billing manager at the practice, which serves approximately 3,000 patients at offices in Haddon Township, NJ, and Wayne, Pa.

Among other things, the lawsuit alleged that the McGraths routinely submitted false claims to the government for procedures that were not medically necessary and billed for x-rays on most if not all patients in order to maximize revenue. Also, the clinics routinely billed the government and received payments for full physical therapy sessions even though the sessions often were much shorter than reported or were performed by non-licensed therapists.

“The McGraths were rewarded financially and patients were placed at risk when unlicensed and untrained employees performed procedures a licensed physician must oversee or perform himself. The defendants enriched themselves at the expense of those patients, many of whom were elderly, and the government,” said attorney Brian J. McCormick, Jr., of Ross Feller Casey, who represented the whistleblower in the case. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future. This case should stand as a warning to those who choose to put profits above patient care.”

McCormick also praised the government attorneys and investigators who worked on the case. “Their tireless efforts gave the McGraths little choice but to settle,” McCormick said. “The U.S. Attorney’s Office in New Jersey did a fantastic job, and those attorneys and the investigators from the FBI and HHS should be commended.”

The whistleblower worked as the billing manager for the medical practice from 2013 to 2015, until she was terminated for reporting the fraud to the federal government. Under the agreement, she will receive more than $380,000 of the settlement proceeds. The federal False Claims Act contains a provision that permits whistleblowers to file suit on behalf of the U.S., and to share in any recovery.

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