Recent False Claims Act settlement highlights emerging area of risk

Just before Thanksgiving, the U.S. Department of Justice (DOJ) announced a $45 million settlement to resolve allegations of overbilling in violation of the False Claims Act (FCA). What is unique about this particular overbilling is the manipulation of the electronic health records system’s algorithm to propel inappropriate utilization and billing the highest-reimbursable code.

The key take-away, per Assistant Attorney General Brett A. Shumate, “[p]roviders that manipulate electronic health records systems to drive in appropriate utilization or billing of Medicare services undermine the integrity of the Medicare program and waste taxpayer dollars.” In addition to the $45 million settlement with DOJ, Dr. Ameet Vohra and his companies, including Vohra Wound Physicians Management, LLC (collectively “Vohra”), entered into a five (5) year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG).

The case, United States of America v. Dr. Ameet Vohra, et al., Case No. 1:25-cv-21570 (M.D. Fla.), was brought by the United States and was filed on April 4, 2025. Fundamentally, the FCA violations between December 2017 through the present, are for the alleged submission of false or fraudulent claims for payment to Medicare for wound care services, including debridement, which is essentially the removal of necrosed or unhealthy tissue that inhibits healing. Elderly patients, including those in nursing homes and skilled nursing facilities. Per paragraph 7 of the Complaint, “[u]nder its business model, Vohra agrees to provide all wound care services to the contracted facilities’ patients at. No cost to the facilities. Vohra represents it will instead bill Medicare for the services provided at the facilities.”

As to the emerging area of risk, manipulation of the electronic medical record system (EMR), the key aspects of the Complaint follow:

• Paragraph 10: Design of its EMR. Vohra WPM and Dr. Vohra created a proprietary [EMR] system that limited the clinical data that could be entered, often forced physicians to select from pre-populated drop-down options, and severely restricted the type, amount, and quality of information physicians could record in the EMR system. In fact, until April 2023, Vohra’s EMR system only included one option for debridement procedures that the EMR simply labeled ‘debridement.’ In the EMR system, it was impossible for a physician to specify which type of debridement procedure was performed. Then, Vohra WPM and Dr. Vohra programmed the EMR system to automatically bill all debridement procedures as the most expensive type of debridement procedure, surgical excisional debridements. In Vohra’s EMR system, less expensive, non-surgical debridements simply did not exist. (emphasis added).
• Paragraph 11: Vohra and Dr. Vohra programmed the EMR system to automatically insert language in patients’ charges that, on its face, appeared to be specific clinical observations and statements by the physician about the procedure and what the physician did during the procedure (i.e., ‘with clean surgical technique…,’ among others). But these sentences and phrases were instead just pre-programmed text. They are not based on, nor do they actually reflect, the scant information actually entered by the doctor. These false medical records and procedures notes were created in an attempt to generate documentation that would support the services billed to Medicare and to evade scrutiny by Medicare and other payors in the event of an audit. (emphasis added).
• Paragraph 12: Incomplete and Misleading Training. Vohra trained its physicians, most of whom lacked specific wound care expertise and had practiced in other specialties and/or other countries, to provide frequent debridement procedures.
• Paragraph 14: Dr. Vohra and Vohra WPM closely tracked Vohra physicians’ utilization of debridement procedures and enforced Vohra WPM’s corporate targets through the use of tools that functioned as quota systems. … Physicians who met and exceeded the corporate targets received rewards and promotions.
• Paragraph 16: Vohra WPM and Dr. Vohra knew or should have known that they could not submit claims to Medicare with billing codes that represented more complex procedures than were actually performed (commonly referred to as ‘upcoding’) and that medically unnecessary services are not eligible for reimbursement from Medicare.
• Paragraph 30: Pursuant to the terms of the Management Services Agreements, Vohra WPM provides all billing and collection services for the Practice Entities. This includes selecting the Current Procedural Terminology (“CPT code”0 for the procedures or services performed by the physician, creating the claims that includes the selected CPT codes, and causing that claim to be submitted to Medicare on behalf of Practice Entities. Vohra WPM is also authorized to collect on physician services provided by the Practice Entities.
• Paragraph 36: From 2019 to 2023, Dr. Vohra took over $300 million in distributions from VHS Holdings.
• Paragraph 89: Vohra WPM makes all decisions with respect to the development, design, implementation, and operation of the EMR.
• Paragraph 90: Vohra makes all decisions about the content of t he claims and the manner in which claims are submitted to Medicare and other payors.
• Paragraph 117: Specifically, when Medicare pays for a patient’s care via a bundled payment to the facility (which is a single payment for the combined cost of covered services and supplies during a patient’s stay), and that bundled payment includes payment for non-surgical debridement procedures, it is the expectation that the facility will be providing such services. Therefore, outside physicians cannot also bill Medicare for non-surgical debridements because this would cause Medicare to pay twice for the same service. Instead, the outside physician must bill the facility and not Medicare in those circumstances.
• Paragraph 125: If the physician listed any percentage of the devitalized material in the wound bed, a debridement procedure was mandatory. Unless the physician marked that one of a scant few, narrow “Reasons for No Debridement” applied, the EMR would not let the physician continue to document the encounter without documenting a debridement procedure. The use of “Reasons for No Debridement” was closely monitored by Vohra WPM management and Dr. Vohra, and Vohra Physicians were subject to retraining if they used it to override mandatory debridement too often.
• Paragraph 128: Despite the lack of clinical input, the EMR system automatically added what purported to be patient and procedure specific clinical observations by the treating physician to the procedure not in the medical record, but was instead just pre-programmed text, generated by the EMR, without any input from the treating physician.

In sum, preprogramming EMRs or manipulating algorithms, which form the basis of artificial intelligence (AI) applications can lead to FCA liability through the knowing submission of false and fraudulent claims. This is an area that compliance program leaders should monitor and coordinate with EMR vendors to avoid a similar adverse outcome – a multi-million dollar settlement and a CIA.

Rachel V. Rose, J.D., MBA, advises clients on compliance, transactions, government administrative actions, and litigation involving health care, cybersecurity, corporate and securities law, as well as False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rose can be reached through her website, www.rvrose.com.