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Sioux City-based medical group will pay over $600k for false insurance claims

Tri-State Specialists has agreed to pay over $612,500 to resolve allegations it billed for unnecessary procedures and for more than what was actually performed.
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Empty waiting room at medical office

CEDAR RAPIDS, Iowa — To resolve allegations of violating the False Claims Act by billing government health care programs for medically unnecessary procedures and for more than what was actually performed, Tri-State Specialists has agreed to pay just over $612,500.

The money will go to the U.S. and the states of Iowa and South Dakota. Because the matter was handled in civil court rather than criminal, the money will dismiss the alleged fraud without the medical group having to admit guilt.

According to a release from the U.S. Department of Justice, the government had alleged the Sioux City-based medical group had submitted false claims for payment from 2014-2019 to Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits Program. 

The claims in question were for surgical procedures and office visits from a plastic surgeon formerly with Tri-State, according to the department. The procedures were allegedly cosmetic procedures (tummy tucks, breast reductions, etc.) not reimbursable by the government programs and were falsely build as medically necessary procedures. The government also alleged the surgeon did not perform services sufficient to justify high-value billings.

The settlement fell onto Tri-State rather that the surgeon because, allegedly, the medical group was liable for the surgeon's acts because the surgeon worked for the group and the group was aware of the false claims.

According to the department of justice, the issue arose under the whistleblower provisions of the False Claims Act. Pursuant to the act and the settlement agreement, the whistleblower will share a portion of the federal government's settlement earnings.