San Diego Physical Therapy Clinics’ Owners Pay $450,000 to Resolve Fraud Allegations

Assistant U.S. Attorney Dylan M. Aste (619) 546-7621

NEWS RELEASE SUMMARY – February 13, 2019

Two San Diego physical therapy clinics and their owners have paid $450,000 to resolve allegations that they fraudulently billed military healthcare provider TRICARE for medical services that were supposedly performed by qualified medical doctors, but were actually provided by unqualified and unauthorized employees.

South Bay Physical Medicine, Inc. and Direct Health Medical Center, Inc. d/b/a San Diego Spine and Rehabilitation were physical therapy clinics.  Brett Allan, Sr., Brett Allan, Jr. and Jeff Allan owned the clinics. 

TRICARE is the health care program for uniformed service members, retirees, and their families. TRICARE specifically limits billing privileges to enrolled providers for a variety of reasons, including the safety of patients. Some incidental services rendered by non-authorized providers can be billed as “incident to” the services of an enrolled physician, but only under rare circumstances and when the physician provides direct supervision.  The United States alleged that the Allans violated the False Claims Act by billing TRICARE for physical therapy services provided solely by unqualified and unauthorized personnel and without the necessary physician supervision. 

“The United States Attorney’s Office works hard to safeguard the integrity of the TRICARE program and the safety of our soldiers and their family members,” said U.S. Attorney Robert Brewer.  “Health care fraud hurts the entire health care system, from taxpayers down to honest providers and innocent patients. We are committed to using all available remedies, both civil and criminal, to combat health care fraud.”

“The announced resolution is a significant victory because the integrity of the U.S. military's health care program is of utmost importance to our military personnel and their families,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office.  “DCIS remains committed to working with its law enforcement partners and the U.S. Attorney's Office to combat health care fraud and, more specifically, bring to justice those who seek to defraud the military health care system.”

“When health care providers participate in fraudulent billing schemes in order to increase profits, they steal from the pockets of the taxpayer and jeopardize federal healthcare programs,” said John Brown, FBI Special Agent in Charge. “San Diego is a military town and military personnel represent a large part of our community. It goes without saying that the FBI is committed to working with our partners to aggressively investigate health care providers that defraud the DoD, in order to preserve American taxpayer dollars intended to care for our Warfighters, their family members, and military retirees.”

The Government’s resolution of this matter illustrates its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, and abuse can be reported at https://www.tricare.mil/ContactUs/ReportFraudAbuse.

This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the U.S. Attorney’s Office for the Southern District of California, the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the Defense Health Agency Program Integrity Office.

The claims resolved by this settlement are allegations only and there has been no determination of liability.