When the Claim Does Not Match the Record: A Compliance Warning for Medical Practices

On October 16, 2026, the U.S. Attorney’s Office for the District of Connecticut announced an $866,539 False Claims Act settlement with a physician and two affiliated medical practices. The physician and practices also agreed to a three-year exclusion from federal healthcare programs.

The government alleged two forms of improper billing:

First, the practices sought reimbursement from a federal COVID-19 program for treating uninsured patients. Participating providers were required to confirm that the patients were uninsured. According to the government, the practices possessed insurance cards and other information showing that certain patients had coverage but changed their insurance designation in the electronic medical record to “Covid19 HRSA Uninsured.”

Second, the practices operated an in-house laboratory using standard blood-testing panels. Each test was billed separately to Medicare or Medicaid. The government alleged that the practices sometimes lacked the reagents needed to perform every test but billed for the complete panel anyway.

How Billing Investigations Begin

Healthcare investigations do not always begin with a government agent or whistleblower. Billing analytics, payer audits, patient complaints, medical-record requests, and routine claims reviews can reveal discrepancies.

In separate litigation involving the same practices, public court records show that Cigna’s Special Investigations Unit identified unusual billing patterns, requested medical records, and interviewed patients. Cigna alleged that certain services were not rendered as billed. The public record does not establish that Cigna initiated the later government investigation, but it illustrates how billing concerns can surface.

Government and Commercial Payers Both Matter

The federal False Claims Act imposes liability when someone knowingly submits, or causes another person to submit, a false claim for government payment. “Knowingly” includes actual knowledge, deliberate ignorance, and reckless disregard. Specific intent to defraud is not required. For example, if a practice learns that its EHR or billing system may be charging for an entire laboratory panel when some tests were not performed but continues submitting the claims without investigating or correcting the problem, that conduct may create False Claims Act exposure. Liability can include three times the government’s damages, per-claim penalties, repayment obligations, and program exclusion.

Commercial payers can also deny claims, demand repayment, impose prepayment review, terminate network participation, pursue litigation, or refer suspected misconduct to government authorities. Claims submitted to private insurers may also involve government funds when the insurer administers Medicare Advantage, Medicaid managed care, or another public program.

Practical Steps for Healthcare Practices

An EHR or outside billing company does not transfer responsibility for claim accuracy. Practices should:

• Compare claims with clinical documentation and test results.
• Review automated charges and standard laboratory panels.
• Confirm that patient insurance information is accurate.
• Investigate and correct possible overpayments promptly.
• Periodically audit billing vendors and internal workflows.

HHS-OIG’s General Compliance Program Guidance provides a useful starting point.

Seddiq Law Firm advises healthcare practices on regulatory compliance, billing workflows, vendor responsibilities, and operational controls in Virginia and Washington D.C. A focused compliance review can identify vulnerabilities before they become repayment demands, payer disputes, or government investigations.

Call (703) 558-9311, email info@seddiqlawfirm.com, or click here to contact us to schedule a consultation.

Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Reading this article does not create an attorney-client relationship with Seddiq Law Firm. You should not act, or refrain from acting, based on this article without consulting an attorney or other qualified advisor regarding your specific situation.