OSWEGO — A central New York audiology chain with an Oswego location has agreed to pay more than $500,000 after federal agents busted unlicensed audiologist bills and a marketing scheme to tempt patients with free turkeys and iPads before bilking the federal government with phony billing.
Oviatt Hearing and Balance, LLC — which has audiology practices in Oswego, Syracuse, Camillus and Manlius — will pay restitution to settle its alleged violation of the False Claims Act, also called the “Lincoln Law.”
Oviatt falsely billed the federal government for services rendered by unlicensed individuals and inappropriately provided gift cards plus other inducements to Medicare and TRICARE beneficiaries, according to officials from the United States Attorney’s office.
The company has agreed to pay $566,263.08 to resolve the allegations, said U.S. Attorney Grant Jaquith and Scott Lampert, special agent in charge of the U.S. Health Department and Human Services for the state Inspector General.
“Oviatt Hearing and Balance provided improper inducements to attract patients, allowed audiology testing by unlicensed and unsupervised employees, and then falsely billed Medicare and TRICARE as if the exams had been done by professionally licensed audiologists,” said Jaquith in a statement.
Local taxpayers benefit from this type of settlement because as funds are recovered, the fraudulent use of government programs is lessened and offenses are seen in the public eye, one of the federal prosecutors on the case told The Palladium-Times on Tuesday.
“At the end of the day, the people who win are the taxpayers. The statue is meant to help address fraud against the taxpayer,” said Assistant U.S. Attorney Adam Katz, adding the sizeable penalty is “certainly large” for audiology settlements in the region.
Also implicated in the official court complaint obtained by The Palladium-Times were then-Oviatt Director of Operations Marcus Porter; Oviatt’s Chief Audiologist Ryan Potter; and parent companies Hear Better Centers, LLC, One Retail and Audiology Services Company USA, LLC.
The investigation was triggered by a whistleblower lawsuit filed under a provision of the False Claims Act, which allows private persons to file civil actions on behalf of the government and share in any recovery. The investigation lasted roughly two years, according to officials.
The whistleblower, a former employee of Oviatt, initiated the action in 2016 and court documents conclude the person was terminated in the summer as a result of the defendant’s actions.
A total of $120,000 will be paid to the individual from the settlement proceeds.
In the settlement, Oviatt admitted that on various days between January 2016 and November 2016, the company allowed two unlicensed individuals, alone in the office and unsupervised, to perform audiology tests on federal health care program beneficiaries. Oviatt then billed those services to Medicare and TRICARE as though a licensed provider rendered them.
Oviatt also admitted it utilized promotions from July 2011 to January 2018 to federal health care program beneficiaries.
Federal officials say Oviatt offered and provided kickbacks in the form of improper inducements to federal health care program beneficiaries so that they would come to Oviatt where services billable to the government were available, in direct violation of federal policy.
The inducements included entering beneficiaries into a contest for a free iPad, and offering beneficiaries free Butterball turkeys, $15 Visa gift cards, $15 Dunkin Donuts gift cards, and $30 Omaha Steaks gift cards.
The court documents concluded that to sell hearing aids, the defendants used Medicare as “bait,” promising free screenings to get patients in the door before billing the national health insurance program for evaluations without prescriptions in violation of the rules.
This is done to “hard sell” a patient on their hearing aids, according to the documents, and as a result the defendants billed for and received payments from Medicare for services that do not qualify for coverage, officials said.
The defendants “hard sell” tactics went beyond inducements, the complaint alleged. Beginning in late 2016, defendants hosted a marketing event in Camillus where patients were pitched a new pair of hearing aids for $5,000, but were shown an advanced model that cost roughly $6,500.
The documents detail several occasions where this “bait and switch” tactic was used and patients were sold a lower-level version of the hearing aid without being told they were different from those being demonstrated.
The False Claims Act provides that any person who knowingly presents, causes to be presented or conspires to present a false or fraudulent claim to the U.S. for payment or approval is liable for a civil penalty of between $10,781 and $21,563 for each claim submitted. Damages sustained from the payment by the U.S. are also factored into the final number.
Attempts to reach Nicholas Graham, the current Oviatt director of operations, for comment were unsuccessful as of Tuesday evening.