California physician, pain clinic chain to pay $11M million to settle fraud allegations

A California physician and the pain clinic chain he owned agreed to pay more than $11.3 million to settle allegations they submitted millions of dollars of false claims to Medicare, Medi-Cal and Oregon Medicaid for medically unnecessary services. 

Francis Lagattuta, MD, and Lags Spine & Sportscare Medical Centers submitted claims for medically unnecessary skin biopsies, spinal cord stimulation surgeries and urine drug testing, according to a July 11 Justice Department news release. 

The settlement amount of $11,388,887 is based on Dr. Lagattuta and Lags Medical's ability to pay and includes proceeds from his sale of a remotely operated underwater vehicle. Dr. Lagattuta also agreed to a voluntary five-year exclusion from federal healthcare programs.  

The settlement includes the resolution of claims brought under the whistleblower provisions of the False Claims Act, the release said. The whistleblower, Lags Medical's former operations and marketing director, will receive $2.1 million. 

"The government insurers asserted that the testing performed by the many individual physicians and other medical providers previously employed by the Medical Centers was not within their program testing and billing policy parameters or did not conform to their medical necessity directives," Dr. Lagattuta's attorney Malcolm Segal said in a July 11 news release. "Since the centers have been closed for a couple of years, it made sense for Dr. Lagattuta to settle the dispute and continue to move forward with his other business interests and practice."

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