Federal officials today announced an ear, nose and throat doctor in Carroll with clinics in eight other Iowa cities has agreed to pay $1 million to resolve allegations of Medicaid billing fraud. The doctor said the settlement is not an admission of wrong doing.

According to a news release from the U.S. Attorney’s Office in Cedar Rapids, Dr. Tracey Wellendorf was accused of performing sinus surgeries that did not meet Medicaid’s “medically necessary” standards or were incorrectly coded on bills submitted to Medicaid. Officials indicate the doctor’s $1 million payment to the government relates to as many as 115 procedures performed from the fall of 2014 through the fall of 2015.

Dr. Wellendorf released a written statement through his attorney, saying reasonable people can disagree about the best medical treatment options and neither he nor the clinic are admitting doing anything wrong. Wellendorf said there were “no adverse patient outcomes” and he’s” happy and relieved” to have what he described as an “expensive, time-consuming and distracting” matter resolved.

A special agent in the U.S. Department of Health and Human Services said Wellendorf has agreed to “intensive quarterly monitoring by an independent review organization” over the next three years. Wellendorf said that additional scrutiny will show “complete compliance” with Medicaid regulations and professional standards.

The website for Wellendorf’s Carroll clinic shows the doctor operates satellite clinics in Atlantic, Corning, Denison, Ida Grove, Jefferson, Lake City, Red Oak and Storm Lake.

The US Attorney’s news release and Wellendorf’s written statement are below.

Northwest Iowa Otolaryngologist Agrees To Pay $1,000,000 To Resolve Medicaid False Claims Allegations

Allegations Relate To As Many As 115 Procedures
Performed on Iowa Medicaid Beneficiaries

Dr. Tracey Wellendorf, an otolaryngologist with a clinic in Carroll, Iowa, agreed to pay $1,000,000 to resolve False Claims Act allegations relating to as many as 115 procedures performed on Iowa Medicaid beneficiaries between October 13, 2014, and November 27, 2015.

The allegations relate to claims for endoscopic sinus surgeries. The United States alleges that the claims submitted for the subject procedures were improper either because they did not meet the applicable medical necessity standard or were otherwise incorrectly coded for payment.

“Medical providers who perform unnecessary procedures or wrongfully code claims violate the public trust,” said Peter E. Deegan, Jr., United States Attorney for the Northern District of Iowa. “This settlement is another indication of our office’s dedication to vigorous enforcement of the False Claims Act and our unyielding effort to protect patients, save taxpayer money, and ensure a fair marketplace for honest practitioners.”

In addition to agreeing to pay the $1,000,000 settlement, Dr. Wellendorf also entered into an Integrity Agreement with the Department of Health and Human Services Office of Inspector General. That agreement requires Dr. Wellendorf to engage in enhanced compliance measures for the next three years.

“Medically unnecessary services pose potential harm to patients and place needless burdens on taxpayers who fund government health programs,” said Curt Muller, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “HHS OIG entered into an integrity agreement requiring Dr. Wellendorf submit to three years of intensive quarterly monitoring by an independent review organization.”

The matter arose from an affirmative investigation. False Claims Act cases can also be brought under the qui tam provisions of the Act, which encourage whistleblowers to bring suit on behalf of the United States and share in any financial recovery.

The case was handled by Assistant United States Attorney Jacob Schunk and investigated by the State of Iowa’s Medicaid Fraud Control Unit and the Department of Health and Human Services Office of Inspector General.


Recently my ear, nose, and throat clinic, Wellendorf ENT, and I reached an agreement with the United States Attorney’s Office for the Northern District of Iowa and the Department of Health and Human Services to resolve concerns the government alleged about the handling of certain sinus surgical patients in 2014 and 2015.

We are happy and relieved to have this matter behind us. The process with the government has gone on for years and been expensive, time-consuming, and distracting from the practice of medicine. Thankfully we can now look forward to focusing on what we do best at Wellendorf ENT – patient care.

In the agreement neither I nor our clinic admitted to doing anything wrong and there were no adverse patient outcomes in the cases that are the subject of this agreement. It is also worth noting that no lawsuit or court action of any kind has been filed. Everything is settled.

We have always practiced medicine with the patient’s best interests at heart. But there are areas of medicine where, we believe, reasonable people can disagree about the best treatment course for a patient. Unfortunately, in today’s highly-regulated medical environment, those disagreements can become very substantial legal disputes.

Why did we settle? I felt that it was in the best interests of our staff, our patients, and the communities we serve to put the legal matters behind us rather than have a battle in court, and so that is what we have done.
Wellendorf ENT delivers the highest quality care to its patients. That will be confirmed by some temporary increased compliance measures that we have committed to undertake as part of this agreement. Frankly, we welcome the additional scrutiny because we are confident of what those oversight measures will show – excellence and complete adherence to regulatory requirements.

I want to thank the staff at Wellendorf ENT for their support and the good work they do every day. I also want to thank our patients, other health care providers, and the hospitals where we practice for supporting us and helping keep rural Iowans healthy. Again, we are happy to have this government matter settled and believe the best times for our clinic and the people who work in it are ahead.