United States Attorney Adam L. Mildred has announced a settlement totaling nearly $1.7 million to resolve civil claims brought by the United States and the State of Indiana against Don J. Wagoner, a former physician from Burlington, Indiana, and his business, Wagoner Medical Center, L.L.C.
According to case documents, between 2011 and 2013, Wagoner operated Wagoner Medical Center as its sole owner. During this period, the defendants required patients seeking prescriptions for opioid or other pain medications to provide urine samples for qualitative drug testing. The center used a multiplexed screening kit that cost about ten dollars per test but billed Indiana Medicaid at rates of $171.27 or more per patient—despite billing rules allowing only $20.83 per patient.
The defendants are reported to have concealed their actions by falsely certifying that they had collected and separately analyzed nine or more urine samples from each patient when only one sample was actually collected and tested per visit. This fraudulent practice led to over 5,000 claims being submitted and an overpayment of nearly $1 million from Indiana Medicaid that was not repaid.
On December 29, 2017, federal and state authorities filed a complaint under the False Claims Act seeking recovery of these funds as well as civil penalties. The settlement announced resolves this litigation.
Indiana Medicaid is designed to provide healthcare for low-income residents who cannot otherwise afford medical care. It is funded jointly by federal and state governments. Under both the federal False Claims Act and the Indiana Medicaid False Claims Act, authorities can recover improperly obtained funds along with additional penalties. A portion of such recoveries is allocated toward future healthcare fraud investigations.
In connection with a separate state criminal investigation into his opioid-prescribing practices—which resulted in felony drug dealing convictions—Wagoner permanently surrendered his licenses to prescribe drugs and practice medicine in 2013.
“Although they no longer are endangering vulnerable Medicaid patients by practicing medicine, former physician Don Wagoner cannot be allowed to retain the fruits of his fraudulent Medicaid claims,” said United States Attorney Adam L. Mildred. “The U.S. Attorney’s Office will continue to make it a priority to pursue investigations and cases to recover funds that were fraudulently received from the Medicare and Medicaid programs.”
The settlement concludes a case brought by the United States Attorney’s Office for the Northern District of Indiana alongside the Indiana Medicaid Fraud Control Unit within the Indiana Attorney General’s Office. Assistant United States Attorney Wayne T. Ault served as lead counsel for the plaintiffs in this matter.
