Todd J. Scarbrough, MD, and Melbourne Internal Medicine Associates (MIMA) have agreed to pay the U.S. $12 million to settle claims that the healthcare providers violated the False Claims Act by submitting false claims to Medicare and the military’s healthcare program (Tricare), according to the Department of Justice (DoJ).

MIMA provides healthcare services through a network of facilities located in Brevard County, Fla. Scarbrough was the medical director and practicing radiation oncologist at one of those facilities, the MIMA Cancer Center in Melbourne, Fla.

In the complaint, filed on Oct. 16, 2009, the DoJ alleged that, from the time of its inception through 2008, the MIMA Cancer Center, led by Scarbrough, improperly billed for certain radiation oncology services and caused false and fraudulent claims to be submitted to Medicare and Tricare.

The U.S. investigation said that the MIMA Cancer Center had “defrauded the federal healthcare programs by improperly inflating claims through various schemes specifically designed to cloak the fraudulent practices.” In particular, the MIMA Cancer Center billed for services not supervised, duplicate and unnecessary services, services not rendered and upcoded services - a practice in which provider services are billed for higher procedure codes than were actually performed, according to the DoJ. The U.S. investigation also found that MIMA executives had knowledge of a substantial number of the fraudulent billing practices at the facility, but had failed to stop the fraudulent billing.

The allegations resolved by the March 23 settlement were initiated by a whistleblower lawsuit filed under the False Claims Act, which allows a private party to file suit on behalf of the U.S. for fraud and to receive a share of the recovery. The whistleblower, Fred Fangman, former director of radiation oncology at MIMA Cancer Center, will receive $2.64 million of the settlement.