Lubbock doctor's estate, UMC Physicians pay $3.2 million fraud settlement

Published: Aug. 8, 2016 at 7:51 PM CDT|Updated: Aug. 8, 2016 at 8:18 PM CDT
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LUBBOCK, TX (KCBD) - The Department of Justice has announced a multi-million dollar settlement against the estate of a Lubbock doctor and the group that employed him.

Dr. Mike Rice and UMC Physicians will pay $3.2 million to the U.S. and the State of Texas to settle a fraud case.

Dr. Rice and UMC Physicians were accused of submitting false claims for payment to Medicaid and Medicare.

Both groups deny the allegations.

Dr. Rice died when his plane hit a KCBD guy wire in February of last year.

Here's the full text of the release provided by the United States District Attorney for the Northern District of Texas:

The Estate of Dr. Kenneth Michael Rice and UMC Physicians (UMCP) have agreed to pay a total of $3,280,000.00 to the United States and the State of Texas to settle allegations that Dr. Rice and UMCP violated the False Claims Act, announced U.S. Attorney John Parker of the Northern District of Texas.

Specifically, the United States alleged that Dr. Rice, by and through UMCP, submitted false claims for payment to Medicaid and Medicare related to in-person evaluation and management services, as well as critical care services.  The Estate of Dr. Rice agreed to pay the United States and the State of Texas $2,000,000, collectively, to settle the allegations.  UMCP agreed to pay $1,280,000 to settle the matter.  Both the Estate of Dr. Rice and UMCP fully cooperated with the investigation and, by settling, did not admit any wrongdoing or liability.

UMCP, a physician practice management group located in Lubbock, Texas, employs healthcare providers for its sole managing member, the Lubbock County Hospital District d/b/a UMC Health System (UMC).  UMCP employed Dr. Kenneth Michael Rice as a healthcare provider at UMC from February 12, 1996 through his death on February 4, 2015.  The settlement resolves allegations that from January 2008 through February 2015, Dr. Rice, by and through UMCP, billed Medicare and Medicaid for in-person evaluation and management services at the higher physician fee rate, even though the services were often provided by non¬physician providers.  Dr. Rice and UMCP are also alleged to have billed normal evaluation and management services to Medicare at the higher critical-care rate.  The Estate and UMCP deny the allegations.

"Health care providers, like all those that choose to do business with the government, must turn square corners when billing Medicare and Medicaid for services provided to patients," U.S. Attorney Parker said.  "As this settlement demonstrates, we will continue to work to ensure that providers bill for and are paid for the services they provide – but no more."

The Texas Medicaid Fraud Control Unit and the Civil Medical Fraud Division of the Office of the Attorney General for the State of Texas participated in the resolution of this matter.  The case was handled by Assistant U.S. Attorney Kenneth G. Coffin.

UMC provided this statement on Monday afternoon:

UMC Health System and UMC Physicians thank the federal and state government for working with us to resolve reimbursement matters related to the late Dr. Mike Rice's medical practice. UMC Health System and UMP have entered into a $1.28 million settlement agreement with the government, part of a larger settlement that also includes Dr. Rice's estate. The issues do not involve the quality of the care patients received. Rather, the issues concern how medical services were documented, coded and billed to Medicare and Medicaid. We have implemented additional processes to assure compliance with complex regulations, including improved monitoring and increased training efforts.

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