United States Attorney Adam L. Mildred has announced a settlement of nearly $1.7 million with former physician Don J. Wagoner and his business, Wagoner Medical Center, L.L.C., to resolve civil claims brought by the United States and the State of Indiana regarding fraudulent billing practices involving the Indiana Medicaid program.
According to case documents, between 2011 and 2013, Don J. Wagoner operated Wagoner Medical Center in Burlington, Indiana. During this period, the practice required patients seeking prescriptions for opioid or other pain medications to provide urine samples for drug testing. The defendants used a multiplexed screening kit costing about ten dollars to test each sample for nine or more drugs or drug classes. However, they billed Indiana Medicaid at rates of $171.27 or more per patient instead of the allowable $20.83 per patient under Medicaid rules.
The government alleges that Wagoner and his clinic concealed their actions by falsely certifying that they had collected and analyzed nine or more separate urine samples from each patient when only one sample was actually tested. This scheme led to over 5,000 false claims and resulted in an overpayment from Indiana Medicaid of nearly $1 million, which was not repaid.
On December 29, 2017, federal and state authorities filed a complaint under the False Claims Act seeking recovery of these funds as well as civil penalties. The recently announced settlement resolves this litigation.
Indiana Medicaid provides healthcare services for low-income residents who may not otherwise afford medical care and is funded jointly by federal and state governments. Under both federal and state False Claims Acts, authorities can recover funds paid out due to false claims in addition to imposing penalties. A portion of recovered funds—three percent—is allocated to support future healthcare fraud investigations.
In connection with a state criminal investigation into his opioid-prescribing practices in 2013, Don J. Wagoner permanently surrendered his licenses to prescribe drugs and practice medicine following felony drug dealing convictions.
“Although they no longer are endangering vulnerable Medicaid patients by practicing medicine, former physician Don Wagoner cannot be allowed to retain the fruits of his fraudulent Medicaid claims,” said United States Attorney Adam L. Mildred. “The U.S. Attorney’s Office will continue to make it a priority to pursue investigations and cases to recover funds that were fraudulently received from the Medicare and Medicaid programs.”
The case was pursued by the United States Attorney’s Office for the Northern District of Indiana in collaboration with the Indiana Medicaid Fraud Control Unit within the Indiana Attorney General’s Office. Assistant United States Attorney Wayne T. Ault served as lead counsel for the plaintiff United States during litigation and settlement negotiations.
