U.S. Attorney Announces $600,000 False Claims Act Settlement With Medical Practice And Its Owners For Improper Medicare And Medicaid Billing

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the Department of Health and Human Services, Office of Inspector General ("HHS-OIG"), announced today that the United States has filed and simultaneously settled a civil fraud lawsuit against ORANGE MEDICAL CARE, P.C. ("ORANGE MEDICAL") and its owners, ASHIKKUMAR A. RAVAL and MANISH A. RAVAL (together, the "RAVALS" and with ORANGE MEDICAL, the "Defendants").

The RAVALS are physicians who own and operate ORANGE MEDICAL, a family medicine practice that provides primary care services to patients in Newburgh, New York. The settlement resolves claims that ORANGE MEDICAL and the RAVALS fraudulently billed Medicare and Medicaid by submitting claims for primary care services that were not rendered or supervised by the physician identified in the claim for payment and had, in fact, been rendered by non-credentialed providers.

Under the settlement approved Saturday, August 17, 2024, by U.S. District Judge Paul Gardephe, ORANGE MEDICAL and the RAVALS will pay $268,800 to the U.S. and have admitted and accepted responsibility for conduct alleged in the Complaint as further described below. ORANGE MEDICAL and the RAVALS have also agreed to pay $331,200 to the State of New York to resolve the State of New York's claims, for a total recovery of $600,000. The settlement amount is based on the Office's and the State of New York's assessment of ORANGE MEDICAL's and the RAVALS' ability to pay based on the financial information they provided. The parties have also executed a Consent Judgment in the amount of $1,646,835, which may be enforced if the Defendants do not make the payments required under the settlement agreement.

U.S. Attorney Damian Williams said: "Orange Medical and the Ravals submitted false claims to Medicare and Medicaid, failing to accurately identify who was involved in their patients' treatment. This Office is committed to ensuring that individuals and entities billing federal health care programs do so in an honest manner."

HHS-OIG Special Agent in Charge Naomi Gruchacz said: "As a part of this settlement, the defendants acknowledged that Orange Medical obtained funds from the Medicare and Medicaid programs for claims that did not comply with those programs' billing rules. Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients."

As alleged in the Complaint filed in Manhattan federal court:

From November 2006 through December 2022, ORANGE MEDICAL and the RAVALS submitted claims to Medicare and Medicaid that listed one of the RAVALS as the rendering provider even though the services had been rendered by non-credentialed providers, without the direct supervision of the RAVALS. On many such occasions, the RAVALS were traveling outside of the U.S. at the time the patient received the treatment.

As part of the settlement, ORANGE MEDICAL and the RAVALS admitted and accepted responsibility for certain conduct alleged by the U.S., including the following:

• ORANGE MEDICAL and the RAVALS understood that they were prohibited by relevant federal healthcare program rules from submitting claims for reimbursement to Medicaid in the State of New York for primary care services if the physician listed as the rendering provider on the claim for reimbursement had not actually rendered the services and, with respect to Medicare, if the services were not, at minimum, rendered "incident to" medical services actually provided by the physician listed on the claim. ORANGE MEDICAL and the RAVALS further understood that, in order to receive reimbursement from Medicaid, a healthcare provider must be enrolled as a provider in the Medicare or Medicaid program at the time the services are rendered.

• Nonetheless, ORANGE MEDICAL and the RAVALS frequently submitted claims to Medicaid and Medicare for primary care services that listed Manish Raval or Ashikkumar Raval as the rendering provider, even though they had not rendered the services for which reimbursement had been sought. In fact, the services had been performed by providers who had not enrolled in the Medicare or Medicaid programs. Further, the providers that had rendered the services were often not physicians, but instead nurse practitioners or physician assistants. On many such occasions, the RAVALS had no personal involvement or supervision in the treatment of the patient and were traveling outside of the U.S. at the time that the services were furnished.
• ORANGE MEDICAL and the RAVALS also altered patient records to reflect falsely that one of the RAVALS had seen a patient when, in fact, the patient had been seen by a different provider.

• As a result of the conduct described above, ORANGE MEDICAL received reimbursements from Medicare and Medicaid for primary care claims that did not comply with those programs' billing rules.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.

* * *

Mr. Williams praised the outstanding investigative work of HHS-OIG, and he thanked the Medicaid Fraud Control Unit at the New York State Attorney General's Office for its extensive collaboration in the investigation and resolution of this case.

The case is being handled by the Office's Civil Frauds Unit. Assistant U.S. Attorney David E. Farber is in charge of the case.

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