False claims allegations cost MRI vendor, ex-owners, $3.6 million

A New York-based diagnostic testing company--Imagimed, LLC--its former owners, and the company's former chief radiologist, have agreed to pay $3.57 million to resolve allegations it submitted false federal healthcare program claims for MRI services, the Department of Justice has announced.

Imagimed, along with owners William B. Wolf III and Timothy J. Greenan, and chief radiologist Steven Winter, M.D., were alleged to have submitted claims to Medicare, Medicaid and TRICARE between 2001 and 2008 for the performance of MRI scans with a contrast dye without the direct supervision of a qualified physician. Federal regulations require that a physician supervise the administration of contrast due to the possibility of anaphylactic shock.

They were also alleged to have submitted claims between 2005 and 2008 for services referred to Imagimed by physicians with whom, according to the DOJ, the company had "improper financial relationships."

"In exchange for these referrals, Imagimed entered into sham on-call arrangements, provided pre-authorization services without charge and provided various gifts to certain referring physicians, in violation of the Stark Law and the Anti-Kickback Statute," an announcement from the DOJ said.

The allegations were the result of a lawsuit filed under the False Claims Act's whistleblower provisions by radiologist Patrick Lynch, M.D., who will receive $565,000.

"This case is an example of our commitment to using all of the remedies available, including civil actions under the False Claims Act, to ensure patient safety and combat healthcare fraud," Richard S. Hartunian, U.S. Attorney for the Northern District of New York, said in the announcement. "Stripping away the profit motive for circumventing physician supervision requirements has both a remedial and a deterrent effect.  The settlement announced today advances our critical interest in both the integrity of our health care system and the safe delivery of medical services."

Over the years, healthcare has been the main driver in the huge amount of money the federal government has been able to recover in False Claims Act cases. According to an analysis by international law firm Gibson Dunn, the government has recovered more than $10 million in False Claims Act healthcare cases since 2009.

To learn more:
- read the announcement from the DOJ
- see the analysis of False Claims Act healthcare cases