Obamacare: 2 clinics cut expenses to survive, fined $1.85M based on speculation

1.26.2014

KNOXVILLE (AP) - Two orthopaedic clinics serving patients in Tennessee and Virginia have agreed to pay a combined settlement of $1.85 million to resolve claims that they purchased medications overseas at cut-rate prices and then billed the government at much higher rates.

Bill Killian, U.S. attorney for the eastern district of Tennessee, announced the agreement on Friday. Under the settlement, Tennessee Orthopaedic Clinics, which is headquartered in Knoxville, will pay $1.3 million and Kingsport-based Appalachian Orthopaedic Clinics will pay $550,000.

The government said the drugs, used to treat osteoarthritis, were sometimes labeled in foreign languages and there was no guarantee that they had not been tampered with or that they were stored properly.

The claims against the clinics were first brought by a whistle-blower. The whistle-blower will receive almost $324,000 of the settlement.

In a statement released by the Tennessee Orthopaedic Clinics, they say the group has negotiated an agreement with federal authorities in order to avoid the cost of litigation. 

The statement says in part, "That agreement does not contain any admission of wrongdoing. The issue does not involve patient care in any way, but revolves around a question of product distribution and appropriate government reimbursement."

See a full copy of the statement by clicking this link. 

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