Greenbelt vein clinic settles false-claims litigation for $4.7M

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A vascular medicine firm settled for $4.7 million with the Department of Justice as well as eight states, including Maryland, and two whistleblowers, who accused the firm of billing government health plans for medically unnecessary vein treatments.

The Justice Department moved last week to dismiss its False Claims Act suits against CVR Management, LLC, which manages operations for the Center for Vein Restoration, after the Greenbelt-based firm and its CEO agreed to pay $3.3 million to the federal government.

An additional $604,000 will go to state Medicaid programs, Maryland Attorney General Anthony Brown‘s office said in a Tuesday news release. Maryland, which led the coalition of eight Medicaid-participating states suing, will receive over $168,700, to be shared with the federal government, according to Brown’s office.

The Center for Vein Restoration said in a statement that it “unequivocally” denies the allegations and settled to avoid the time and cost of more litigation “so we can remain centered on our patients.”

“Throughout the investigation, we have cooperated with the government and maintained that our clinical decisions were based on medical necessity and supported by robust internal processes,” the center said. “This dispute centered around clinical judgments about which reasonable physicians can, and sometimes do, disagree.”

The settlement stems from two qui tam lawsuits filed at the U.S. District Courts in Maryland and the Eastern District of Pennsylvania. Two former CVR employees — Baltimore-based surgical assistant Karen Fulton and a Jane Doe — sued on behalf of the Justice Department. They will receive $752,000 from the settlement.

A qui tam action, also known as a whistleblower suit, allows these private parties called relators to sue on behalf of the government and receive a portion of any funds recovered. They are most common in False Claims Act lawsuits against health firms.

The lawsuits alleged that the health care firm engaged in a fraudulent scheme in which it billed Medicare, Medicaid and TRICARE for unnecessary procedures to treat chronic venous insufficiency, a condition in which vein walls are weakened by damaged vein valves. According to the complaints, the firm falsely upgraded patient ratings, like venous clinical severity scores, to justify the treatments.

The cases centered around reimbursements for procedures such as sclerotherapy, radiofrequency ablation and endovenous laser ablation treatments that the plaintiffs alleged weren’t necessary.

Government health programs don’t cover those treatments for purely cosmetic reasons — chronic venous insufficiency must be accompanied by certain other conditions to warrant coverage, and such treatments must occur only after patients undergo specified alternative options prove unsuccessful, according to the release from Brown’s office.

The plaintiffs alleged that the Center for Vein Restoration’s medical practices also billed government health plans for those more conservative treatments, even though they didn’t happen.

The plaintiffs alleged that the firm, which operates 16 locations in Maryland and more across the U.S., incentivized employees to perform more procedures with quotas and a bonus system based on the number of new patients seen, scheduled treatments and procedures performed by each physician.

Brown, a Democrat, said in a statement that the “settlement sends a clear message: we will hold providers accountable when they put profits over patients and misuse public health dollars.”

“Billing for medically unnecessary procedures saps public confidence in the health care system and is a drain on the public fisc,” Maryland U.S. Attorney Kelly O. Hayes said in a statement.

Jay Holland, who represented Fulton through Joseph Greenwald & Laake, said his client was “justifiably horrified” at the billing practices she saw and decided to come forward.

False claims suits arising out of government health insurance claims are often “long and difficult” because they require substantial federal resources to review documentation, Holland said. Fulton’s case, which was litigated under seal for over a decade, has had a “big impact on her life,” Holland said, but she “is really gratified that the right thing was done.”

The plaintiffs alleged that the fraudulent billing strategies came under the direction of Dr. Sanjiv Lakhanpal, the firm’s founder and CEO. Lakhanpal, who was named as a defendant, has not faced any disciplinary action from the Maryland Board of Physicians, according to the board’s license lookup.

The Center for Vein Restoration also settled federal class-action litigation surrounding a 2024 ransomware attack that compromised the personal information of over 448,000 people. Last November, U.S. District Judge Deborah L. Boardman issued a final approval of the $3.5 million settlement related to the data breach. That settlement became effective in December.

This story has been updated with the Center for Vein Restoration’s and Holland’s comments.