Resolution Announcement:
U.S. Attorney Tessa M. Gorman announced a settlement in a False Claims Act qui tam case involving a Tacoma physician accused of billing government insurance programs for medically unnecessary spinal surgeries. CHI Franciscan Health and St. Joseph Medical Center will pay $745,654, and former Orthopaedic Surgeon Kevin Schoenfelder will pay $197,054 to resolve the matter.
Background:
The case began on May 21, 2018, when Dr. Daniel Nehls filed a qui tam lawsuit alleging that Dr. Schoenfelder had performed unnecessary spinal surgeries. The allegations included claims that CHI Franciscan Health billed for surgeries at more spinal levels than necessary and for unnecessary spinal fusions at Tacoma’s St. Joseph Hospital. These surgeries, performed between January 1, 2013, and June 30, 2018, were billed to Medicare, TRICARE, and Veterans Affairs.
Government Statements:
- U.S. Attorney Gorman: Emphasized the risks to patients from unnecessary surgeries and the importance of protecting taxpayer-funded healthcare.
- HHS-OIG Special Agent in Charge Steven J. Ryan: Highlighted the pursuit of those who abuse federal healthcare programs.
- VA OIG Acting Special Agent in Charge Gregory S. Phelan: Stressed the need to protect the integrity of VA’s programs and services.
- DCIS Special Agent in Charge Bryan D. Denny: Underlined the commitment to ensuring healthcare programs focus on patient care and safety.
Settlement Details:
- No admission of wrongdoing by the doctor or the hospital.
- Payments made to government health programs for improperly billed amounts and additional penalties.
- Dr. Nehls, the whistleblower, will receive 22% of the payments to the government health programs.
- Dr. Schoenfelder retired in 2018 and surrendered his physician license in 2019.
Case Information:
The case, filed under the qui tam provisions of the False Claims Act, is captioned United States ex rel. Daniel Nehls v. Catholic Health Initiatives et. al, C18-540-BHS. The resolution was handled by Assistant United States Attorneys Kayla Stahman and Nickolas Bohl.
