Texas Orthopedic Surgeon to Pay $300K to Settle False Claims, Kickback Case

November 27, 2019

The U.S. Attorney’s Office for the Northern District of Oklahoma reported that a Texas surgeon has agreed to resolve False Claims Act allegations that he accepted illegal kickback payments from OK Compounding LLC for $300,000.

This is the twelfth kickback settlement involving OK Compounding LLC since November 2018, the U.S. Attorney’s Office said.

According to federal officials, from April 2013 through September 2015, Dr. Ian Reynolds, 71, an orthopedic surgeon in Friendswood, Texas, prescribed pain creams to his patients, facilitating the sale and distribution of the creams. As compensation for his services, OK Compounding paid Dr. Reynolds what was characterized by the parties as “medical director fees” based upon an hourly rate. However, the payments Dr. Reynolds received from OK Compounding were, in actuality, “kickbacks,” the U.S. Attorney’s Office said.

Because some of the patients were federally insured by Medicare, TRICARE, the Veterans Health Administration and the Federal Employees Compensation Act Program (FECA), the kickbacks were in violation of the False Claims Act.

This civil settlement resulted from an investigation into numerous health care providers writing prescriptions for pain creams compounded and sold by OK Compounding in return for the kickback payments.

This civil settlement resulted from an investigation into numerous health care providers writing prescriptions for pain creams compounded and sold by OK Compounding in return for the kickback payments.

It is illegal to pay or receive “kickbacks” in conjunction with federal health care insurance. Prohibitions against kickbacks are crucial to insure that financial motives do not undermine the medical judgment of physicians and other health care providers. The civil False Claims Act is an important tool used to protect the integrity of taxpayer-funded health care programs.

This matter was handled by Assistant U.S. Attorney Kristin Harrington, and is the product of a collaborative investigation by the Defense Criminal Investigative Service, Department of Labor – Office of Inspector General (OIG), IRS – Criminal Investigation Division, U.S. Postal Service – OIG, FBI, Department of Veterans Affairs – OIG and the Department of Health and Human Services–OIG.

The claims resolved by the settlement are allegations only; there has been no determination of liability, the U.S. Attorney’s Office said.

Source: U.S. Attorney’s Office for the Northern District of Oklahoma

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