A Texas-based dermatology management company agreed to pay nearly $8.9 million to settle allegations by the Department of Justice (DOJ) regarding apparent violations of the False Claims Act.

The settlement total agreed to by Oliver Street Dermatology Management, doing business as U.S. Dermatology Partners (USDP), includes approximately $5.9 million in restitution, U.S. Attorney for the Northern District of Texas Leigha Simonton announced in a press release Wednesday.

The details: Between January 2013 and July 2018, USDP acquired multiple dermatology practices across the United States.

In September 2021, the company voluntarily self-disclosed to the DOJ credible evidence that former senior managers offered or agreed to increase the purchase price of 11 acquired dermatology practices in exchange for referrals to USDP-affiliated entities following the acquisition, the DOJ alleged. Claims for some of those services were later submitted to Medicare for payment, the DOJ found.

This conduct appeared to violate the Anti-Kickback Statute and the Stark Law.

“We applaud this company for self-reporting its potential violations and cooperating with government investigators, allowing us to reach a swift settlement,” said Simonton in the release.

Compliance considerations: The settlement credited the company for its self-disclosure and collaboration. The self-reported conduct was unknown to the United States at the time and was specific to potentially problematic transactions, personnel involved, and potential financial impact on the government, according to the DOJ.

USDP did not respond to a request for comment. The company agreed to the settlement without admitting liability.

Jeff Dale is Managing Editor, Editorial Projects and Analytics, at Compliance Week. He previously served as Compliance Week's Digital Editor and has worked as a copy editor at the Boston Herald and city editor at The Hour Publishing Co. in Norwalk, Conn.View full Profile

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