Physician Hit for $1.6M Over Substandard Colonoscopies

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By Eric Topor

A Texas physician is paying $1.57 million to resolve allegations of billing Medicare for colonoscopies that fell below satisfactory care standards, the DOJ announced Oct. 11 ( United States ex rel. Pavlat v. Digestive & Liver Disease Consultants PA, S.D. Tex., No. 13-cv-411, settlement announced 10/11/17 ).

Gurunath Reddy and United Surgical Partners International, which jointly owns an ambulatory surgical center with Reddy, agreed to settle the lawsuit brought by a former nurse at the surgical center, who claimed she was fired the day after bringing her concerns to a United regional vice president. United is a subsidiary of Tenet Healthcare. Reddy and United didn’t admit to any guilt or liability as part of the settlement agreement.

Allegations of patient harm tend to draw particular attention from the Department of Justice when evaluating False Claims Act lawsuits filed by whistle-blowers and influence whether the DOJ ultimately intervenes in an FCA action. The settlement is also the latest in a noticeable uptick in 2017 of FCA settlements involving physicians.

The whistle-blower, Denise Pavlat, claimed that Reddy performed many colonoscopy procedures in under two minutes; failed to perform full procedures necessary to catch possible cancerous lesions or polyps; and didn’t change surgical gowns or properly clean instruments between patient exams. Pavlat said claims submitted to Medicare for Reddy’s procedures were improperly upcoded for additional reimbursement, and she accused Reddy of receiving illegal kickbacks for referrals.

‘Shocking’ Allegations

Kay Gunderson Reeves, an of counsel attorney with Waters Kraus & Paul in Dallas, represented Pavlat and told Bloomberg BNA Oct. 12 that her firm was “honored to have represented Denise” and for Pavlat’s willingness to bring the “shocking” allegations to light.

Acting U.S. Attorney for the Southern District of Texas Abe Martinez said in an Oct. 11 statement that "[w]hen Medicare pays for a patient to undergo a medical procedure, Medicare expects the health care provider to follow established medical standards of care and sanitation.” Martinez added that "[t]here is no excuse for shortcutting quality in order to increase revenues.”

Reeves noted the danger of retaliation that whistle-blowers face in raising their concerns, as Pavlat alleged happened to her, and that Reddy wasn’t “a person of little stature” in the medical community. Reddy is a former president of the Harris County Medical Society and a former president of the Houston Academy of Medicine.

United declined to comment on the settlement, and counsel for Reddy didn’t respond to Bloomberg BNA’s request for comment.

Winston & Strawn LLP represented the defendants. Waters Kraus & Paul represented Pavlat.

To contact the reporter on this story: Eric Topor in Washington at

To contact the editor responsible for this story: Peyton Sturges at

For More Information

The complaint is at

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