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Charlotte doctor settles Medicare fraud case, will pay back more than $2 million

Dr. Hemanth Rao, a Charlotte neurologist, has agreed to pay more than $2 million to the federal government to settle civil fraud allegations in connection with administration of intravenous therapy.

Rao is owner of the Neurological Institute in Charlotte, formerly known as Neurological Consultants of the Carolinas.

The group has four offices, in Charlotte and Monroe.

The settlement was reached following a multiyear investigation by the U.S. Department of Health and Human Services.

Investigators found that, from Oct. 13, 2003, to May 26, 2006, Rao failed to meet Medicare regulations requiring physician supervision of intravenous immunoglobulin therapy, according to a statement from Anne Tompkins, U.S. attorney for the Western District of North Carolina.

Rao’s lawyer, Wanda Townsend of Johnston, Allison & Hord law firm in Charlotte, called the investigation a “five-year witch hunt” and said her client denies putting patients in danger.

“Dr. Rao provided a service to the community without any patient complaints and without any substantial financial gain. Dr. Rao has not admitted any liability and denies any liability in this matter.... (He) settled this case in an effort to put the five-year witch hunt behind him and so that he may continue to provide quality care to his patients.”

Intravenous immunoglobulin is a blood product extracted from the plasma of more than 1,000 donors. It is used to treat patients with autoimmune disorders and immune system deficiencies. The thick fluid is injected into the veins of patients over the course of several hours, and the effects last between two weeks and three months.

Medicare requires physicians to directly supervise the treatment.

But government investigators found that Rao sought and received Medicare reimbursement for the therapy even though he was not in the building when patients received it.

“Dr. Rao allowed his staff to practice a potentially hazardous procedure on Medicare patients, without his supervision, then blatantly charged taxpayers,” said Derrick Jackson, a federal special agent.

The settlement also requires Rao to pay an additional $500,000 to Medicare upon the sale of real estate holdings.

He also entered into a five-year Integrity Agreement “to promote compliance” with statutes and regulations governing federal health programs.

Assistant U.S. Attorney Don Caldwell handled the case for the U.S. Attorney’s Office. The investigation and charges are the result of the Western District’s joint Health Care Fraud Task Force.

Rao, 48, has practiced in North Carolina since 1996 and has no record of disciplinary action with the N.C. Medical Board.

He graduated from Madras Medical College in India in 1988. He completed residency in neurology at Long Island Jewish Medical Center in 1994 and a fellowship in neuromuscular medicine at Washington University of School of Medicine in St. Louis in 1995.

Garloch: 704-358-5078
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