In a significant financial settlement, Bluestone Physician Services entities in Florida, Minnesota, and Wisconsin have agreed to pay nearly $15 million to resolve accusations of submitting fraudulent healthcare claims to Medicare, Medicaid, and TRICARE. The allegations suggest that from 2015 to 2019 these entities were engaged in "upcoding," billing for higher-paying services than they actually provided, particularly for chronic care management in assisted living and other facilities.

"Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans," said Principal Deputy Assistant Attorney General Brian M. Boynton, highlighting the impact of such fraud on national healthcare programs. In response, the Bluestone entities will pay $14,902,000, with the lion's share of the settlement, about $13.8 million, replenishing federal coffers, and the states of Florida, and Minnesota receiving just over $1 million combined.

The fraud complaint originated from within, pushed to the surface by whistleblower Lisa Loscalzo, the former General Manager for Bluestone’s Florida operation. In reward for her efforts, Loscalzo is set to receive more than $2.8 million, a portion of the settlement, as allowed by the whistleblower provisions of the False Claims Act, according to the U.S. Attorney's Office for the District of Minnesota.

Alongside financial restitution, Bluestone has committed to a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG). This measure is designed to prevent a recurrence of the issue and will include an independent review of the company's Medicare claims to verify their necessity and accuracy, "When health care providers submit false claims to taxpayer-funded federal health care programs, including inappropriately inflating claims to boost profits, the public’s trust in our nation’s medical providers and the integrity of federal health care programs are put at risk," stated HHS-OIG Special Agent in Charge Mario M. Pinto.

This case underscores the Department of Justice's and its partners' ongoing commitment to policing healthcare fraud. Tips and complaints about potential fraud, waste, abuse, and mismanagement may be reported to HHS at 800-HHS-TIPS (800-447-8477). Handling the legal aspects were Trial Attorneys Erin Colleran and Joanna Persio of the Civil Division’s Fraud Section, as well as Assistant U.S. Attorneys Kristen E. Rau and Emily Peterson for the District of Minnesota, and Assistant U.S. Attorney Kelley Howard-Allen for the Middle District of Florida. It's worth noting that the settled claims are just that — allegations without a legal determination of liability.