Chronic Disease Management Provider To Pay $14.9M To Resolve Alleged False Claims

Medicare Fraud Scheme

Bluestone Physician Services Settles $14.9 Million Fraud Allegations: A Legal Overview

Bluestone Physician Services of Florida LLC, Bluestone Physician Services, P.A., and Bluestone National LLC have agreed to a $14,902,000 settlement to resolve allegations of fraudulent billing practices.

The entities, operating in Florida, Minnesota, and Wisconsin respectively, were accused of knowingly submitting improper claims for Evaluation and Management (E&M) services related to chronic care patients in assisted living and other care facilities.

The allegations focused on claims submitted between January 1, 2015, and December 31, 2019. During this period, Bluestone was alleged to have billed for services using two specific E&M codes—the domiciliary rest home visit code for established patients (99337) and the chronic care management code (99490)—without supporting the required level of service.

Principal Deputy Assistant Attorney General Brian M. Boynton spoke to the press about the impact of such fraudulent activities, stating:

“Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans. We will pursue health care providers that defraud the taxpayers by knowingly submitting inflated claims.”

The federal government will receive $13,842,482 of the settlement, with $1,059,518 allocated to the States of Florida and Minnesota.

The investigation revealed that Bluestone’s billing practices potentially compromised public trust and the integrity of federal healthcare programs.

Special Agent in Charge Mario M. Pinto of the HHS-OIG Chicago Regional Office highlighted the risks posed by such actions, stating:

“When health care providers submit false claims to taxpayer-funded federal health care programs, the public’s trust in our nation’s medical providers and the integrity of federal health care programs are put at risk.”

As part of the settlement, Bluestone has entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG.

This agreement requires Bluestone to establish and maintain a compliance program and submit to an Independent Review Organization’s assessment of their Medicare claims to ensure they are medically necessary, appropriately documented, and correctly coded.

The settlement also resolves claims brought under the whistleblower provisions of the False Claims Act by Lisa Loscalzo, Bluestone’s former General Manager for the Florida market. Under these provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Loscalzo will receive $2,831,380 as part of the settlement.

The resolution was the result of coordinated efforts by the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorneys’ Offices for the District of Minnesota and the Middle District of Florida, with assistance from HHS-OIG, the Defense Criminal Investigative Service, and the FBI.

This case underscores the government’s commitment to combating healthcare fraud, leveraging the False Claims Act as a powerful tool.