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Northwest Iowa otolaryngologist agrees to pay $1,000,000 to resolve Medicaid false claims allegations

Federal courthouse, Northern District of Iowa in Cedar Rapids
CEDAR RAPIDS – Dr. Tracey Wellendorf, an otolaryngologist with a clinic in Carroll, Iowa, agreed to pay $1,000,000 to resolve False Claims Act allegations relating to as many as 115 procedures performed on Iowa Medicaid beneficiaries between October 13, 2014, and November 27, 2015.

The allegations relate to claims for endoscopic sinus surgeries. The United States alleges that the claims submitted for the subject procedures were improper either because they did not meet the applicable medical necessity standard or were otherwise incorrectly coded for payment.

“Medical providers who perform unnecessary procedures or wrongfully code claims violate the public trust,” said Peter E. Deegan, Jr., United States Attorney for the Northern District of Iowa. “This settlement is another indication of our office’s dedication to vigorous enforcement of the False Claims Act and our unyielding effort to protect patients, save taxpayer money, and ensure a fair marketplace for honest practitioners.”

In addition to agreeing to pay the $1,000,000 settlement, Dr. Wellendorf also entered into an Integrity Agreement with the Department of Health and Human Services Office of Inspector General. That agreement requires Dr. Wellendorf to engage in enhanced compliance measures for the next three years.

“Medically unnecessary services pose potential harm to patients and place needless burdens on taxpayers who fund government health programs,” said Curt Muller, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “HHS OIG entered into an integrity agreement requiring Dr. Wellendorf submit to three years of intensive quarterly monitoring by an independent review organization.”

The matter arose from an affirmative investigation. False Claims Act cases can also be brought under the qui tam provisions of the Act, which encourage whistleblowers to bring suit on behalf of the United States and share in any financial recovery.

The case was handled by Assistant United States Attorney Jacob Schunk and investigated by the State of Iowa’s Medicaid Fraud Control Unit and the Department of Health and Human Services Office of Inspector General.

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