Bluestone Physician Services agreed to pay approximately $14.9 million and abide by a corporate integrity agreement to settle allegations first raised by a whistleblower that it filed false claims to federal and state health programs for chronic pain care to people in assisted living facilities.

The details: From January 2015 through December 2019, Bluestone submitted claims to Florida, Minnesota, and federal health programs that exaggerated the extent of care provided, according to a settlement agreement published Wednesday by the Department of Justice (DOJ).

The company agreed to pay more than $13.8 million to the government, which includes $7.45 million for restitution. It will pay an additional $1.1 million to Florida and Minnesota.

Compliance considerations: Bluestone signed a five-year corporate integrity agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General. Under the CIA, Bluestone must establish and maintain a compliance program and have an independent review organization review its Medicare claims to determine whether such claims are medically necessary, appropriately documented, and correctly coded.

Lisa Loscalzo, the former general manager for Bluestone’s Florida market, originally raised the allegations and will receive about $2.8 million under the qui tam provisions of the False Claims Act.

In addition, the company agreed to pay her $300,000 to cover the cost of her attorney and other fees related to the lawsuit.

Because Bluestone agreed to settle and enter the CIA, it will not be prohibited from continuing to participate in federal health programs, according to the settlement agreement.

“Improperly billing federal healthcare programs depletes valuable government resources used to provide medical care to millions of Americans,” said Brian Boynton, head of the DOJ’s Civil Division, in the agency’s press release. “We will pursue healthcare providers that defraud the taxpayers by knowingly submitting inflated claims.”

Company response: “Nothing about this matter relates to the efficacy of the healthcare we provide, which has improved our patients’ care outcomes and has not been called into question,” Bluestone said in an emailed comment. “Rather, the allegations relate to medical record documentation issues that occurred under prior management between 2015 and 2019. While we deny the allegations, we have agreed to this settlement, so we can focus exclusively on bringing effective, high-quality care to the fragile and medically complex patients who rely on us.”