In a cautionary tale on credentialing, an Alabama hospital and two emergency room physicians have agreed to pay $1.45 million to settle false claims allegations that unlicensed residents treated patients in the emergency room (ER) and that Medicare paid for their services, the U.S. Attorney’s Office for the Southern District of Alabama said Sept. 19.

Vaughan Regional Medical Center in Selma and Integrity Emergency Care Inc., which provided ER physicians to the hospital, allegedly paid unlicensed residents who were foreign medical graduates $50 an hour to treat patients. Their treatment records were signed by Integrity Emergency Care’s licensed physicians, including physician Phillip Alan Hicks, who owned Integrity Emergency Care and is the former Vaughan chief of staff and director of emergency services, and physician Sai S. Namburu. Hicks, Namburu and Integrity Emergency Care were parties to the settlement.

The alleged scheme was exposed by a physician, Samuel Clemmons, whose company, Elite Emergency Services, took over the contract for emergency room services at Vaughan Regional Medical Center. He became a whistleblower and filed the False Claims Act lawsuit. The hospital denies the allegations.

According to the complaint, Vaughan Regional Medical Center had a contract with Integrity Emergency Care to provide ER physicians from 2006 to 2012. During that time, there was a shortage of ER doctors for the shifts, especially the “mid-shift” (noon to 10:00/11:00 p.m.). In response, Vaughan and Integrity Emergency Care retained unlicensed residents who were foreign medical graduates (FMGs) attending the University of Alabama at Birmingham (UAB) Selma Family Medicine Residency Program. They allegedly performed services at Vaughan Regional Medical Center that should have been performed and/or supervised by licensed physicians.