VirtuOx Agrees to Pay $3.15M to Resolve Fraudulent Billing Allegations

MIAMI, Fla. (May 20, 2022)—VirtuOx, Inc., based in Coral Springs, Florida and operating Medicare approved independent diagnostic testing facilities (IDTF), has agreed to pay $3.15 million to resolve allegations that it submitted or caused to be submitted false claims to Medicare for reimbursement.

The United States alleged that, from January 2016 to December 2020, VirtuOx violated the False Claims Act by falsely identifying the place of service for certain services it performed to obtain a higher rate of reimbursement from Medicare. In particular, the United States alleged that, in connection with its billing for overnight pulse oximetry claims, VirtuOx knowingly submitted false claims to Medicare identifying its IDTF located in San Francisco, California as the location of service for overnight pulse oximetry tests when, in fact, no services were performed at that location in relation to the overnight oximetry claims.

VirtuOx said that they settled to be able to move on from the situation. 

“We’re excited to close this chapter, move forward with being able to continue and provide the best clinical services to the patients and the medical professionals we have served since 2005,” said VirtuOx Founder and Chief Marketing Officer Kyle Miko. 

“One of our competitors, Amber Watt, the owner of BREATHE Oximetry, filed a whistleblower Qui Tam suit against us in 2019 after we sent it a demand letter regarding theft of our intellectual property,” the company said in a statement issued by its legal counsel, K&L Gates. “The government conducted a thorough investigation and declined to intervene in the suit. Shortly thereafter, federal judge Robert Scola Jr. dismissed Amber Watt of BREATHE’s unfounded allegations with prejudice.  Amber Watt’s attorneys appealed Judge Scola’s ruling to the 11^th Circuit Court of Appeals, and the government worked with Medicare to put VirtuOx on payment suspension while the appeal played out in court.”

“To avoid protracted and costly litigation, and in order to get the payment suspension lifted, VirtuOx decided to settle the lawsuit without admitting any wrongdoing. We are glad to have this behind us and are excited to refocus on providing best-in-class care to our patients across the country,” the statement continued.   

According to a news release from the Department of Justice, the case alleged that, from January 2016 to December 2020, VirtuOx administered overnight pulse oximetry tests and, at times, also billed Medicare for single determination pulse oximetry tests (commonly referred to as an oxygen spot check) for the same patient when in fact the only test performed was the overnight test. In particular, the United States alleged that, because an awake reading is necessarily taken as part of an overnight pulse oximetry test, the separate billing of a “spot check” is redundant and generally not necessary. Accordingly, the United States alleged that VirtuOx knowingly submitted false claims by separately billing for both an oxygen “spot check” and an overnight pulse oximetry test when only an overnight pulse oximetry test was performed. 

Contemporaneous with the civil settlement, VirtuOx entered into a Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). The five-year CIA requires, among other things, that VirtuOx retain an outside expert to perform annual claims reviews that address the place of service identified on the claim.

Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, and Omar Pérez Aybar, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced the settlement.

“The fraudulent billing of Medicare results in systemically higher medical care costs for all,” said United States Attorney Gonzalez. “My Oofice will continue to hold accountable those health care providers who manipulate the system to benefit their own bottom line.”

“By submitting false claims to Medicare, providers waste valuable taxpayer dollars and undermine the integrity of federal health care programs,” said Special Agent in Charge Omar Pérez Aybar, at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG will continue to investigate such actions to ensure the efficiency and integrity of these programs.”

The whistleblower share to be awarded in connection with the settlement is $630,000.00. Related court documents and information may be found on the website of the District Court for the Southern District of Florida here, under case number 19-cv-61084.