Washington, DC - David Podell, a New Jersey chiropractor, has agreed to pay the United States $2 million to resolve False Claims Act allegations that he both knowingly billed Medicare for medically-unnecessary viscosupplementation injections and knee braces and that he received illegal kickbacks, the Justice Department announced today.  The settlement follows the government’s earlier settlement with seven former Osteo Relief Institutes (ORIs) and their owners, who agreed to pay the United States collectively more than $7.1 million to resolve their False Claims Act liability. 

“Billing for services or items that are medically unnecessary or tainted by illegal kickbacks threatens the integrity of federal healthcare programs,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “The department will continue to pursue providers who seek to improperly enrich themselves at the expense of these programs, their beneficiaries, and the taxpayers.”

Podell previously owned and managed a clinic in Edgewater, New Jersey that performed viscosupplementation, among other procedures.  Along with a business partner, he also promoted a business model to other chiropractors for running and marketing a clinic that specialized in the treatment of osteoarthritis through the administration of fluoroscopic-guided viscosupplementation injections and the provision of knee braces.  This led to the formation of the ORIs.  Viscosupplementation is a treatment for osteoarthritis, in which a doctor injects a gel-like fluid into a patient’s knee joint to act as a lubricant and to supplement the natural properties of joint fluid.  Through his association with his business partner, Podell received a percentage of the ORIs’ collections. 

The government alleged that Podell caused his clinic and other ORIs to bill Medicare for viscosupplementation injections for patients who did not need them, to use multiple brands of viscosupplements successively on patients without clinical support, and to use discounted viscosupplements reimported from foreign countries.  The government also alleged that Podell caused his clinic and the ORIs to provide unnecessary custom knee braces to patients.  The government further alleged that Podell solicited and received kickbacks from a manufacturer of knee braces in exchange for ordering more of the manufacturer’s braces for his clinic.  

“When medical professionals seek to increase their revenue by improperly exploiting public healthcare programs, beneficiaries suffer and taxpayer dollars are wasted,” said U.S. Attorney Erica H. MacDonald for the District of Minnesota.  “Today’s settlement serves as another example of our commitment to address fraud and abuse in the healthcare system.”

“Medical providers have a responsibility to ensure that the products and services that they provide are medically necessary and appropriate,” said Special Agent in Charge Lamont Pugh III, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region.  “Providing medically unnecessary products and services can put a patient’s health and safety at risk and waste vital taxpayer dollars.  HHS-OIG will continue to investigate and hold accountable those who put their financial interests above those of Medicare beneficiaries.”

The allegations resolved by today’s settlement were identified by a government investigation that arose out of a critical analysis of Medicare claims data.  The government’s settlement in this matter illustrates its emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Minnesota, the Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation. 

The claims asserted against this defendant are allegations only, and there has been no determination of liability.