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Virginia-Based Family Medical Practice Agrees to $2.15 Million Settlement for Violating False Claims Act

A Virginia-based company recently agreed to a $2.15 million civil settlement with the state attorney general of and the U.S. Attorney’s office.

Allergy and Asthma Associates Inc., based in Roanoke, will pay the money after allegedly billing Virginia Medicaid and Medicare programs more than $600,000 for asthma treatments it either never purchased or administered in an improper way to their patients.

The medical practice that is family owned pleaded guilty in Roanoke’s U.S. District Court back in June of 2020 to one criminal count of health-care fraud.

Court documents say that between January of 2010 and September of 2017, the company submitted billings to both Medicaid and Medicare. The improper billings were for Xolair, which is a single-use asthma treatment that is quite expensive.

Because of the drug’s nature, many patients need to receive doses with the help of health-care providers administering only part of the vial. This, in turn, leaves unused leftovers of Xolair that the provider doesn’t administer to the patient.

Rules under Medicaid and Medicare sometimes allow for providers of the drug to bill Medicaid and Medicare Part B once for a full vial of the drug. This would include the quantity that was administered to the patient as well as the amount that had to be discarded. The two must add up to the amount that’s listed on the label of the vial.

What AAA allegedly did was take the leftover Xolair that they had and then administer it to other patients. The company then billed both Medicaid and Medicare for administering the amounts as if they were the full vial, rather than what was used and what was left over.

In the time period alleged, the company billed $627,540 to Medicare for Xolair it never purchased. From Medicaid, the company also received 129 vials of the medication but didn’t document it as ever being used for a patient on Medicaid. That resulted in a reported loss of nearly $89,000 for Medicaid.

The total sum that AAA will pay as part of the settlement of claims that they violated the federal false claims act is roughly $2.15 million. Roughly $1.99 million of that will go to the federal government, while a little more than $154,000 will go to the Commonwealth of Virginia.