Highlands Oncology physicians accuse rivals of Medicare fraud

Posted: November 4, 2017 at 1:08 a.m.

A group of Northwest Arkansas oncologists has accused area doctors of participating in a fraud scheme netting them hundreds of thousands of dollars in Medicare reimbursements over several years.

Drs. Thaddeus Beck, Daniel Bradford and four other physicians at Highlands Oncology Group, which has offices in Rogers and Fayetteville, filed a lawsuit claiming the allegations in late 2015 in U.S. District Court. The lawsuit remained sealed from the public until this year.

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United States of America ex rel Dr. J Thaddeus Beck, et al., vs. TruRadiation Partners Arkansas; Northpoint Radiation Center GP; Physicians Radiation Arkansas; Pro Physicians Arkansas; and Dr. Kenneth E. Gardner

The original lawsuit, responses from defendants and other court filings in this case are available online from U.S. District Court for the Western District of Arkansas at https://ecf.arwd.uscourts.gov/cgi-bin/login.pl

The case is labeled 5:15-CV-5275-TLB.

The lawsuit claims more than a dozen physicians affiliated with Mercy Northwest Arkansas, Northwest Health and other clinics referred Medicare patients to Landmark Cancer Center in Rogers while having a financial stake in the center, violating federal law.

The latest version of the lawsuit was filed in October and claims the physicians billed Medicare thousands of times from 2012 to 2016 for least $612,000. Federal laws banning kickbacks for referrals involving federal health care programs such as Medicare and similar actions impose penalties that can reach into the millions of dollars depending on the number of times the laws were broken.

The defendants denied wrongdoing, saying in court filings the lawsuit is a legal assault by one of the region's main cancer treatment centers against a competitor.

"Relators' lawsuit is one of many measures taken by Highlands Oncology against Landmark for threatening its former position as the only radiation oncology service provider in the Northwest Arkansas metropolitan area," the defendants wrote in a motion to dismiss the lawsuit in July, though they don't explain those measures. District Judge Timothy Brooks in Fayetteville last month partially granted the dismissal motion, narrowing the list of defendants and leading to the amended lawsuit.

Todd Lewis, a Fayetteville lawyer representing some of the defendants, said Friday they plan to countersue the Highlands Oncology physicians later this month, claiming wrongdoing in the other direction.

Few of the other physicians, organizations and lawyers connnected to the lawsuit responded to phone and email requests for further comment left over several days last week. Mercy declined to comment.

The lawsuit is based on a trio of anti-fraud federal laws called the False Claims Act, Anti-Kickback Statute and Physician Self-Referral Law -- "the three-headed monster of healthcare fraud prevention and enforcement," according to an online summary from the American Bar Association, a professional group for attorneys.

The False Claims Act allows private individuals or businesses, such as Highlands Oncology, to sue alleged law-breakers on behalf of the federal government and receive up to 30 percent of the financial penalties resulting from a case, according to the Cornell Law School Legal Information Institute. Such a case is sealed at first so the people it accuses of fraud might not be aware of the federal investigation.

The government can join the case as a party in the lawsuit if it chooses. Assistant U.S. Attorney Deborah Groom in Fort Smith declined to make a decision either way in the lawsuit, telling the court in January, "The United States continues to investigate the matter." Brooks unsealed the lawsuit at that point.

A spokesman for the U.S. district attorney's office said nothing had changed as of Friday.

The lawsuit specifically names as defendants Dr. Kenneth Gardner, an oncologist who joined Mercy in Fort Smith in May; the business he formed in 2012 called Pro Physicians Arkansas; and three interrelated businesses: TruRadiation Partners Arkansas, Physicians Radiation Arkansas and a Texas-based company called Northpoint Radiation Center.

The lawsuit claims the companies together did business at Landmark Cancer Center and allowed doctors who referred patients to its services to have partial ownership in the project and earn part of the profit. The lawsuit details 20 unnamed patients' appointments and their Medicare bills and states four physicians other than Gardner received more than $200,000 in profit sharing.

Fourteen doctors other than Gardner who are named in the lawsuit aren't defendants in the case, meaning they weren't served with the lawsuit, wouldn't be penalized as it stands and haven't responded to its claims in court. They include urology, pulmonology and ear, nose and throat specialists at Mercy, Northwest Arkansas Urology Associates and Northwest Health.

The defendant companies have yet to respond in court to the amended lawsuit filed last month. Brooks gave them until Nov. 15. But Lewis, their attorney, said Friday they still deny the allegations.

"These doctors are attempting to deny patients from having other cancer treatment options," he wrote in a statement.

Gardner responded to the lawsuit through his attorney Tuesday, telling the court he's done nothing wrong and has behaved ethically and to the benefit of his patients at all times. Gardner couldn't have made improper referrals to a treatment center where he was the one doing the treating, he said.

"Indeed, the plaintiffs themselves engage in the same conduct complained of in this action, i.e. treating patients at facilities in which they hold an ownership interest," the response states, referring to the Highlands Oncology physicians.

NW News on 11/04/2017