Consumer Fraud

Medical imaging company pays $15.5 million to settle whistleblowers’ fraud allegations

osha whistle Medical imaging company pays $15.5 million to settle whistleblowers’ fraud allegationsA New York-based diagnostic imaging company has agreed to pay the U.S., New York, and New Jersey governments a total of $15.5 million to settle whistleblower allegations that it fraudulently billed federal and state health care programs for x-rays and other imaging that it never actually performed or were medically unnecessary.

The settlement also resolves allegations that Diagnostic Imaging Group and its subsidiary company Doshi Diagnostic Imaging Services violated federal kickback laws by rewarding physicians for referrals to their imaging clinics. According to the Justice Department, Diagnostic Imaging provided these kickbacks in the form of excessive payments to doctors for supervising patients undergoing nuclear stress testing.

The allegations were made in a lawsuit filed under the False Claims Act (FCA) by three whistleblowers, Mark Novick, M.D., Rey Solano, and Richard Steinman, M.D. The FCA’s qui tam or “whistleblower” provisions permit private individuals with evidence of fraud and other wrongdoing committed against U.S. government agencies and programs to file a lawsuit on behalf of the United States. In return, whistleblowers share a percentage of the recovery. In this case, the Dr. Novick will receive $1.5 million, Mr. Solano $1.07 million, and Dr. Steinman $209,250 for their role in exposing the fraud.

According to the lawsuit, Diagnostic Imaging Group submitted claims to Medicare and the New Jersey and New York Medicaid Programs for 3-D reconstructions of CT scans that it never actually performed or interpreted. The whistleblowers also accused the company of creating order forms in which certain tests were bundled as a package with other tests so that doctors could not order the appropriate tests without also ordering the additional bundled tests, which patients did not need.

These practices amounted to a submission of false claims to taxpayer-funded health care programs, the Justice Department said.

“When health care providers pay kickbacks and submit false claims to Medicare, they not only deplete the Medicare Trust Fund, they undermine the integrity of the health care system,” said Assistant Attorney General Stuart Delery, adding that the Justice Department would “relentlessly pursue those who misuse federal health care funds for their own profit.”


U.S. Department of Justice