Feds Net Another Million-Dollar Settlement in 21st Century Oncology FISH Testing Case

AFlorida-based urologist is the latest 21st Century Oncology defendant to fork over seven figures to settle charges of false billing for fluorescence in situ hybridization (FISH) tests.

The Original Whistleblower Suit
The case began in March 2013 when a medical assistant filed a qui tam lawsuit claiming that a lab owned by 21st Century billed Medicare and Tricare for medically unnecessary FISH tests. The suit claimed tests were ordered by four Fort Myers-based urologists who allegedly received bonuses from the integrated cancer center based on the number of tests ordered.

FISH tests are performed on urine to detect genetic abnormalities tied to bladder cancer. In addition to being relatively pricey, FISH tests are deemed medically reasonable and necessary for Medicare coverage purposes in very limited situations. 21st Century's billing pattern raised a number of red flags that the OIG would later list in its August 2014 guidance on improper billing of FISH tests, including abnormally high average allowed amount per beneficiary—21st Century's average was 1,193—16 times the average for a non-independent lab. And its average allowed per ordering physician was $107,700—or 24 times (!) the overall average for non-ILs.

The Settlements
So far, the case has yielded $24.86 million as a result of four separate settlements:

• Jan. 2016: 21st Century paid $19.75 million to settle the civil charges, $3.2 million of which went to the medical assistant who brought the whistleblower suit;

• Jan. 2016: Urologist Dr. David Spellberg paid $1.050 million to settle allegations he ordered medically unnecessary tests, including pricey computer assays billed at up to 10 times the standard rate for FISH tests;

• Aug. 2016: Urologist Dr. Robert Scappa paid $250,000 to settle charges of, among other things, receiving bonuses based on volume of FISH tests ordered; and

• Feb. 2017: In the most recent settlement, Dr. Meier Daller, the national leader in number of FISH tests ordered, agreed to pay $3.81 million to settle allegations regarding his role in the scheme.

One urologist, Dr. Steven Paletsky, has yet to settle. When and if he does, it will surely push the overall total recovery from the 21st Century case to over $25 million.

Takeaway: Latest settlement in FISH testing case demonstrates the significant financial impact of whistleblower lawsuits and continued enforcement focus on medical necessity of lab testing.