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In a significant healthcare fraud settlement, the Center for Vein Restoration (CVR) has agreed to pay $4.7 million to resolve allegations that it billed government health plans for medically unnecessary vein treatments. The settlement, reached with the Department of Justice, eight states including Maryland, and two whistleblowers, brings an end to a series of False Claims Act lawsuits against the Greenbelt-based vascular medicine firm.
The Justice Department last week moved to dismiss its suits against CVR Management, LLC after the company and its CEO agreed to pay $3.3 million to the federal government. An additional $604,000 will be distributed to state Medicaid programs, with Maryland receiving approximately $168,700 to be shared with the federal government. Maryland Attorney General Anthony Brown’s office, which led the coalition of eight states in the litigation, announced the settlement on Tuesday.
The case originated from two qui tam lawsuits filed in federal district courts in Maryland and the Eastern District of Pennsylvania. The whistleblowers—Karen Fulton, a Baltimore-based surgical assistant, and an unnamed former employee—will receive a combined $752,000 from the settlement. Qui tam actions allow private individuals to sue on behalf of the government and receive a portion of any recovered funds, a mechanism commonly used in False Claims Act cases against healthcare providers.
According to the complaints, CVR engaged in a fraudulent billing scheme targeting Medicare, Medicaid, and TRICARE—the federal health program for military personnel and their families. The firm was accused of performing unnecessary procedures to treat chronic venous insufficiency, a condition in which vein walls are weakened by damaged valves.
The lawsuits alleged that CVR falsified patient ratings, including venous clinical severity scores, to justify treatments such as sclerotherapy, radiofrequency ablation, and endovenous laser ablation. Government health programs typically don’t cover these procedures when performed for cosmetic reasons alone. For reimbursement to be approved, patients must have specific conditions beyond chronic venous insufficiency, and treatments should only be administered after more conservative approaches have failed.
Additionally, the plaintiffs claimed that CVR billed government health plans for these conservative treatments despite never actually providing them to patients. The firm, which operates 16 locations in Maryland and numerous others across the United States, allegedly incentivized employees to perform more procedures through quota systems and bonuses based on new patient acquisition, scheduled treatments, and procedures performed.
The whistleblowers further alleged that these fraudulent billing practices were directed by Dr. Sanjiv Lakhanpal, the founder and CEO of CVR. Despite being named as a defendant in the case, Dr. Lakhanpal has not faced any disciplinary action from the Maryland Board of Physicians, according to the board’s license database.
“This settlement sends a clear message: we will hold providers accountable when they put profits over patients and misuse public health dollars,” Attorney General Brown said in a statement.
Maryland U.S. Attorney Kelly O. Hayes emphasized the broader implications, stating, “Billing for medically unnecessary procedures saps public confidence in the health care system and is a drain on the public fisc.”
This settlement comes on the heels of another legal challenge for the Center for Vein Restoration. The company recently resolved federal class-action litigation related to a 2024 ransomware attack that compromised the personal information of more than 448,000 individuals. U.S. District Judge Deborah L. Boardman issued final approval of a $3.5 million settlement for the data breach last November, which became effective in December.
The CVR settlement highlights ongoing efforts by federal and state authorities to combat healthcare fraud, particularly schemes involving unnecessary medical procedures and improper billing to government healthcare programs.
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10 Comments
Unnecessary medical treatments not only waste taxpayer money, but can also put patients at risk. This settlement is a win for responsible healthcare practices and public integrity.
$4.7 million is a significant settlement, demonstrating the scale of the alleged fraud at this clinic. Hopefully this serves as a strong deterrent for other providers who may be tempted to bill for unnecessary treatments.
You’re right, the size of the settlement sends a clear message that this type of fraud will be aggressively prosecuted.
While the details are concerning, I’m glad the government was able to recover a substantial portion of the misused funds through this settlement. Deterring healthcare fraud should remain a top priority.
This settlement highlights the importance of scrutinizing healthcare billing practices to ensure patients receive necessary, not excessive, treatment. While unacceptable, it’s good the government pursued this case to recover taxpayer funds and discourage future fraud.
Vein treatment fraud is a concerning issue in the medical industry. It’s reassuring to see whistleblowers come forward and the government take action to hold providers accountable and recover misused public funds.
Agreed, whistleblowers play a critical role in uncovering fraud and abuse. Their courage to speak up should be commended.
It’s disappointing to see a vascular clinic accused of such blatant fraud. However, the government’s actions demonstrate their commitment to rooting out abuse in the medical system.
It’s troubling to see a vascular medicine firm accused of bilking government healthcare programs. This case underscores the need for robust oversight and accountability in the medical industry to protect patients and taxpayers.
This case highlights the importance of whistleblowers in exposing healthcare fraud. Their willingness to come forward and cooperate with authorities is crucial for protecting patients and public funds.