The owners of a chain of physician-owned family practice medical centers in the Midlands have agreed to pay the government $2 million after the government said they billed Medicare and TRICARE for unnecessary services, the U.S. Department of Justice announced Tuesday night.
“The provider’s actions targeted American service members, veterans and their families, diverting valuable resources through unnecessary tests,” said Deputy Director Guy Kiyokawa of the Defense Health Agency in a news release.
Dr. Stephen F. Serbin, principal owner and former chief executive officer of Family Medicine Centers of South Carolina (FMC) , and the former laboratory director, Victoria Serbin, agreed not only to pay to settle the government’s False Claims Act lawsuit but also to have nothing to do with the management of the large practice for five years, to appoint an independent organization to review claims every year and institute other management changes.
FMC clinics in the Columbia area include Springwood Lake Family Practice, Woodhill Family Practice, Midtown Family Practice, Saluda Pointe Family Medicine, Lake Murray Family Medicine and the now-closed Rice Creek Family Medicine.
The Family Medicine Centers of South Carolina, LLC, “adamantly” denied any wrongdoing in a statement about the settlement, taking special exception to “the defamatory allegation that service members and their families were targeted for allegedly unnecessary tests.”
The financial settlement was a business decision only, made to avoid years of costly litigation, FMC said.
The government’s case against the Serbins arose from a lawsuit originally filed against them by a physician formerly employed by FMC, Dr. Catherine A. Schaefer. She sued under whistleblower provisions of the False Claims Act, which will allow her to share in the settlement. She will be paid $340,510.
The government charged that FMC’s incentive compensation plan for its physicians violated the False Claims Act, which prohibits physician self-referral. FMC doctors were paid a percentage of the value of lab and other diagnostic tests that they personally ordered through FMC. The Serbins regularly reminded their doctors that FMC profits were increased by such referrals, and so was their take-home-pay, the government claimed.
“Patients and taxpayers should expect that doctors’ best medical judgment is not clouded by what amount to thinly veiled bribes,” said Special Agent in Charge Derrick L. Jackson for HHS-OIG in announcing the settlement.
Stephen Serbin founded Family Medicine Centers of South Carolina in 1979 after completing a family practice residency at then-Richland Memorial Hospital, information at the FMC website states. The first center opened was the Springwood Lake Family Practice.