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Texas provider Union Treatment Center to pay $3 million over fraud scheme, banned from all federal healthcare programs

UTC fraudulently billed FECA program for services never rendered, overcharged for exams, lied about therapy time, DOJ said.

Beth Jones Sanborn, Managing Editor

Texas Medical and physical therapy provider Union Treatment Center will pay $3 million to resolve allegations the provider defrauded the federal workers' compensation program, known as FECA, the Department of Justice announced.

UTC is also banned from participating in any federal healthcare programs, and will waive payment claims over $1.6 million. The U.S. Department of Labor, Office of Workers' Compensation Programs administers the FECA program, which uses federal funds to reimburse providers that treat covered workers.

UTC has clinics in Austin, Killeen, San Antonio, and Corpus Christi and claimed to specialize in treating workplace injuries. The company marketed itself to patients covered by the FECA program, especially unionized postal workers in Austin and San Antonio and civilian Army employees in the Corpus Christi area, the DOJ said.

[Also: Running list of notable 2017 healthcare frauds]

The United States alleged that UTC, its former CEO Garry Craighead and former CFO Christine Craighead devised and executed a scheme to overcharge OWCP for services and supplies allegedly rendered to patients covered by the FECA program. Between January 1, 2009, and December 31, 2012, the government said in its complaint that UTC fraudulently billed the FECA program for services never actually rendered; regularly overcharged for medical examinations and lied about the time patients spent in therapy. Finally, the complaint alleged UTC billed for services and supplies that were not needed, and offered, payed, sought and received kickbacks in exchange for patient referrals, according to the DOJ.

The government's allegations were part of a whistleblower lawsuit, and despite the settlement there has been no actual admission of liability. Garry Craighead is currently serving 14 years in prison following his guilty plea to kickback and money laundering charges. He will also pay OWCP nearly $18 million in restitution for damage done to the FECA program. Christine Craighead's trial on conspiracy, wire fraud, kickback, and aggravated identity theft charges is set for October 30, 2017.

Twitter: @BethJSanborn

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