Northwest Anesthesiology and Pain Services (NWAP) has agreed to pay $999,999 to resolve potential violations related to the submission of claims for reimbursement to Medicare. This announcement was made by acting U.S. Attorney Jennifer B. Lowery.

NWAP, an anesthesiology service provider in Houston and surrounding areas, faced allegations of violating the False Claims Act (FCA) and the physician self-referral law, also known as the Stark Law.

In 2019, NWAP's former president Donald Carmichael hired Stacey Green and her company Remedy Physician Solutions as an independent contractor to manage NWAP’s pain management practices. Green was given authority over compensation and discretionary productivity bonus payments for these practices.

An internal investigation revealed that Green allegedly instructed NWAP's billing company to calculate bonus payments based on lab referrals minus costs, fees, and expenses rather than on productivity as stipulated in their agreements. NWAP suspected this approach aimed to increase total collections that influenced Green's management fee.

Between January 1, 2019, and December 31, 2021, NWAP reported paying approximately $1.8 million in bonuses due to the contractor’s misconduct.

The government claims these actions led to improper financial relationships between NWAP and its independently contracted pain management practices by providing bonuses from lab revenue as alleged kickbacks for referrals.

“The Stark Law safeguards the integrity of the Medicare program by ensuring patients receive care based on their physician’s independent medical judgment and not any personal financial interests,” said Lowery. “Our office remains committed to protecting the program and reinforcing the public trust in our federal healthcare system, and we will continue to hold those accountable for violating these safeguards.”

“Prohibited referrals and financial incentives in health care jeopardize patient safety and drive unnecessary medical services. Additionally, submitting false claims to Medicare for services resulting from unlawful referrals undermines the integrity of federal health care programs and diminishes public trust,” said Special Agent in Charge Jason E. Meadows of the Department of Health and Human Services - Office of Inspector General (DHHS-OIG). “DHHS-OIG remains resolute in holding accountable those who engage in fraud and disregard the patient-first values central to the medical profession.”

This settlement arose from NWAP's self-disclosure to both the U.S. Attorney’s Office (USAO) and DHHS-OIG. The company received credit for its self-disclosure efforts during this process.

The USAO conducted this investigation with assistance from DHHS-OIG. Assistant U.S. Attorney Michelle Luong managed this case alongside former Assistant U.S. Attorney Andrew Bobb.