DOJ resolves allegations doctor billed government for unnecessary surgeries

TACOMA, Wash. - A resolution has been reached in the case of a Tacoma physician who improperly billed government insurance programs for alleged "medically unnecessary" spinal procedures on veterans.

Over the span of at least five years, orthopedic surgeon Dr. Kevin Schoenfelder billed Medicare, TRICARE, and Veterans Affairs for "medically unnecessary" spinal fusions and other spinal surgeries, according to the United States Department of Justice (DOJ).

On Wednesday, the DOJ announced a resolution of a False Claims Act qui tam matter regarding Schoenfelder and two hospitals he worked out of.

According to Cornell Law School, "In a qui tam action, a relator brings an action against a person or company on the government's behalf. The government, not the relator, is considered the plaintiff. If the government succeeds, the relator bringing the suit receives a share of the award. This is also called a popular action. For example, the federal False Claims Act authorizes qui tam actions against parties who have defrauded the federal government. If successful, a relator in a False Claims Act qui tam action may receive up to 30% of the government's award."

Essentially, it's a whistleblower provision of the False Claims Act.

As a part of the resolution, Catholic Health Initiatives (CHI) Franciscan Health and St. Joseph Medical Center will pay $745,654, and Schoenfelder will pay $197,054 to resolve the case.

It should be noted that neither the doctor nor the hospital and CHI Franciscan admitted wrongdoing. Each entity is paying the government health programs the amount that was improperly billed, plus additional penalties.

In addition, the doctor who reported the false claims will receive 22% of the payments to the government health programs.

"Subjecting veterans to unnecessary medical procedures at the expense of the taxpayer will not be tolerated. Such activities put at risk VA’s ability to provide timely, quality healthcare within the local community," said Acting Special Agent in Charge Gregory S. Phelan of the VA Office of Inspector General’s Northwest Field Office. "The VA OIG will continue to work with our law enforcement partners to ensure the integrity of VA’s programs and services."

"Unnecessary surgeries put patients at risk of medical complications," said U.S. Attorney Tessa Gorman. "In this case, we are concerned about protecting taxpayer-funded health care, but even more concerned that patients may have needlessly suffered when enduring procedures that were more invasive than was necessary."

Schoenfelder retired in 2018 and surrendered his physician license in 2019.