Alliance & Ancor Holdings LP to Pay Millions for Kickbacks and False Billings

It has been another relatively busy month for federal regulators and investigators as companies continue to be unmasked and pay for their devious acts.

One of the most recent cases is that of two Texas companies recently found guilty of paying kickbacks and engaging in several other unsavory acts to boost their business. Now that the law’s arm has caught them, it will be interesting to see how they move forward.

Late last week, the United States Department of Justice published a press release confirming that it had brought action and successfully prosecuted Alliance Family of Companies LLC (Alliance), a national electroencephalography (EEG) testing company, as well as Ancor Holdings LP (Ancor) - a private investment company. Both Texas-based firms were accused of having conspired to defraud the government through a complex system of operations.

Kickbacks and False Billing

According to the press release, Alliance Family of Companies had enticed several referring physicians with free kickbacks - particularly, free interpretations of test results. Many of these interpretations entail sharing the details of tests that have been conducted, for which the physicians themselves don't know. EEG tests are very important, but also complex. If a medical practitioner isn’t skilled in neurology, interpreting test results will be difficult at the very least.

By offering favorable test interpretations, Alliance Family of Companies made it easy for these physicians to bill the government’s healthcare programs - Medicare and Medicaid - as if they had conducted the tests themselves. Alliance Family of Companies most likely got a cut from these physicians and their pay.

Beyond the kickbacks paid, the Alliance Family, which has operations across Texas, was also accused of conducting certain tests and deliberately logging them with the wrong billing code. By doing so, the company was able to get higher reimbursements from its Medicare and Medicaid plans. The company even charged for digital analysis services that it never performed.

With all of these, the Alliance Family of Companies was found to have defrauded the Federal Employees Health Benefits Program and the TRICARE Insurance program for uniformed officers, retirees, and their members. This is in addition to Medicare and Medicaid.

Anchor Was a Willing Partner

As for Anchor Holdings, the company was found to have been complicit in Alliance’s operation. The private investment firm is one of Alliance’s biggest investors, and it reportedly found out the criminal activities that the latter had been engaging in before even doing business with them.

But, instead of confronting Alliance or even reporting them, Anchor Holdings proceeded to invest in the company, entering into a management agreement with them. Some sources believe that Anchor Holdings might have been the root cause of Alliance's false claims. By letting the company bill healthcare programs falsely, Anchor Holdings could increase its profits overall.

Whistleblowers Out Alliance and Anchor

The case was eventually brought to light after whistleblowers tipped the authorities off about what Alliance and Anchor were up to. The whistleblowers - referred to as Realtors Chava and Mandalapu - will be eligible for monetary compensation following the successful prosecution.

Per reports, the investigation was a rather extensive one, involving the U.S. Attorney’s Office for the Middle District of Florida, the U.S. Attorney’s Office for the Southern District of Texas, and the Civil Division’s Commercial Litigation Branch, Fraud Section. Several state attorneys general and Medicaid Fraud Control Units also assisted in bringing the culprits to justice.

Under the provisions of the False Claims Act, Mandalapu and Chava are eligible for monetary compensation following the prosecution of Alliance and Anchor. The Department of Justice has confirmed that Alliance will pay $13.5 million to settle the case, while Anchor will have to fork out $1.8 million. Thus, the whistleblowers are eligible to get up to $2.962 million from the case.

If any additional financial contingencies occur and the government recovers even more money, Chava and Mandalapu will be eligible for more proceeds as well.

Following the prosecution, Jennifer B. Lowery in the U.S. Attorney’s Office for the Southern District of Texas said:

“This settlement should put health care providers on notice that we will hold accountable those who seek to profit by pursuing kickbacks and other improper billing schemes. This office, in coordination with its law enforcement partners, will use all available resources to pursue those who defraud these federal programs and to protect our nation’s health care system.”

As part of the settlement, Alliance has also agreed to a Corporate Integrity Agreement with the Office of the Inspector-General at the Department of Health and Human Safety. It is unclear what the agreement will entail, although it most likely will be monitoring and due diligence. With the agreement set to run for five years, it should be enough to ensure that Alliance operates rightly.


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

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