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Mary Washington Healthcare says it was not responsible for what a federal complaint says was a program of unnecessary testing at NextCare offices
BY JIM HALL
NextCare Urgent Care, a national chain of walk-in clinics, paid $10 million this summer to settle a federal complaint that it defrauded patients and their insurance companies by putting patients through thousands of unnecessary tests.
Yet NextCare, which has clinics in Stafford and Spotsylvania counties, says that it did nothing wrong.
And Mary Washington Healthcare, its partner in Virginia, says it was an investor in NextCare and was not responsible for what federal investigators say was a yearlong, company-wide scheme to bilk its customers.
"They've always operated and managed the clinics," said Walt Kiwall, executive vice president and chief operating officer for Mary Washington. "All the staff are employed by them. The whole system is a NextCare system."
Mary Washington is a partner with NextCare in six urgent care clinics in the region. The partnership began in 2008 with Mary Washington owning 70 percent of the business. In 2010, NextCare increased its ownership share to 50 percent.
It was during this time that NextCare began recommending to patients that they get a battery of tests that federal investigators describe as "medically unnecessary and essentially worthless."
The tests were for allergies, breathing and respiratory infections. If a patient had all three tests, the bill was $732. Local doctors heard from their patients about the costs and complained to both Mary Washington and NextCare.
The testing program is described in a federal lawsuit filed last year in U.S. District Court in Charlotte. Five states, including Virginia, joined in the civil action. NextCare is based in Arizona and has 67 clinics in seven states.
At least one former NextCare employee helped investigators build the case, and the employee shared in the settlement.
Virginia Urgent Care, NextCare's partnership with Mary Washington, was named as a defendant. Mary Washington did not pay anything in the settlement, said Mary Washington and NextCare officials.
NextCare settled the suit in July without admitting any wrongdoing, and it continues to say that it did nothing wrong.
"There was never any proof shown, or any physician that ever determined any medical necessity was inaccurate. We completely disagree with everything in that complaint," said John Julian, CEO of NextCare, in an Oct. 18 phone interview.
Julian said his company paid to resolve the complaint to avoid a lengthy court fight.
Dr. John Shufeldt, former CEO of NextCare, was adamant that his clinics test patients for allergies, regardless of why the patients were there, according to a federal complaint.
Court papers show that in May 2009, he wrote to senior managers about the importance of the testing program:
"I cannot stress enough how important this program is to our financial well-being. The successful implementation of this initiative could literally be our saving factor, which would allow us to come close to our 2009 budget."
Later, in a July 2009 email, Shufeldt set a goal of five allergy tests per clinic per day. He told his managers:
"Beginning Friday, you are strictly accountable for these goals, so I need to know immediately if you have any barriers which would impede your success. The accomplishment of these goals are integral to our future; consequently I will be looking at reports seven days a week."
Shufeldt is a lawyer and an emergency-room doctor. He resigned as CEO in 2010.