Health Care

Olathe medical coder gets $91,000 from Healogics false claims settlement

A medical coder from Olathe received more than $91,000 as part of a whistleblower lawsuit against her former employer, Healogics. The suit alleged that the wound care chain was improperly coding treatments to get higher reimbursements from Medicare and Medicaid.
A medical coder from Olathe received more than $91,000 as part of a whistleblower lawsuit against her former employer, Healogics. The suit alleged that the wound care chain was improperly coding treatments to get higher reimbursements from Medicare and Medicaid.

A medical coder in Olathe received $91,577.42 as part of a whistleblower lawsuit against her former employer, the national wound care chain Healogics.

Laura McGraw worked for a Healogics clinic at Olathe Medical Center from October 2014 until December 2015. She filed a suit in federal court in March 2016, alleging that Healogics systematically "up-coded" certain debridement procedures to get higher reimbursements from Medicare and Medicaid.

Mark Kistler, an attorney with Brady & Associates in Overland Park who represented McGraw, said the company improperly used a payment code called "Modifier 25" that is supposed to be used only when a medical provider performs "evaluation and management" that's unrelated to the other health services a patient received during a visit.

“HHS (The U.S. Department of Health and Human Services) has been concerned about misuse of Modifier 25 for some time," Kistler said. "So apparently it happens with some frequency.”

Jarrod Henshaw, Healogics' chief legal officer, didn't respond to a phone message left Thursday.

Healogics settled the false claims suit with the federal government for $398,162.69. McGraw got 23 percent for her work as a whistleblower. Healogics admitted no wrongdoing in paying the settlement.

The government announced the settlement June 20, the same day it announced that it had also reached a $22.51 million settlement with Healogics in a separate false claims suit for "unnecessary and unreasonable" hyperbaric chamber oxygen treatments.

Kistler said that settlement was bigger because hyperbaric chamber treatments are more expensive.

“Yeah, rough week for Healogics," Kistler said. "But they’re a large company.”

Healogics operates about 800 clinics in 46 states and sees about 300,000 patients a year, according to the suit. A private equity firm acquired the company for $910 million in 2014 and, less than a year later, also acquired its largest competitor.

According to McGraw's suit, Healogics didn't renew its contract in Olathe after 2015 and it hasn't managed the wound care clinic at Olathe Medical Center since 2016.

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