21st Century Oncology Paying $19 Million Settlement In False Billing Case

'Whistleblower' To Receive $3.2 Million Reward

FORT MYERS, FL. -- 21st Century Oncology LLC, has agreed to pay $19.75 million to the government to resolve allegations that it violated the False Claims Act by billing federal health care programs for laboratory tests that were not medically necessary. 21st Century is a nationwide provider of integrated cancer care services that is headquartered in Fort Myers, Florida. 

The settlement resolves allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The whistleblower, a former 21st Century Oncology LLC medical assistant, will receive $3.2 million as her share of the recovery in this case.

The settlement announced today resolves allegations that 21st Century submitted claims to Medicare and Tricare for fluorescence in situ hybridization, or “FISH,” tests that were not medically necessary. FISH tests are laboratory tests performed on urine that can detect genetic abnormalities associated with bladder cancer. 

The government alleged 21stCentury submitted claims for unnecessary tests that were ordered by four of its urologists, Dr. Meir Daller, Dr. Steven Paletsky, Dr. David Spellberg and Dr. Robert Scappa, all of whom practiced in the Fort Myers area. The government also alleged that 21st Century encouraged these physicians to order unnecessary tests by offering bonuses that were based in part on the number of tests referred to 21st Century’s laboratory. Today’s settlement resolves the civil liability of 21st Century only.

“These tests were ordered to increase profits, not improve the healthcare of patients,” said Special Agent in Charge Shimon Richmond of the Department of Health and Human Services Office of Inspector General (HHS-OIG).

Since January 2009, the Justice Department has recovered a total of more than $26.7 billion through False Claims Act cases, with more than $16.8 billion of that amount recovered in cases involving fraud against federal health care programs.

The lawsuit is captioned United States, State of Florida, ex rel. Mariela Barnes v. Dr. David Spellberg, 21st Century Oncology and Naples Urology Associates, Civil Action No. 2:13-cv-228-FtM-38DNF (M.D. Fla.).