WASHINGTON – Midtown Imaging LLC, a radiology clinic, and its former owners Midtown Imaging P.A. and PBC Medical Imaging have agreed to pay $3 million to resolve allegations that the clinic violated the False Claims Act, the Justice Department announced today. The West Palm Beach clinic is alleged to have submitted false claims to Medicare during the period 2000 through 2008 by entering into certain leasing and professional services agreements with referring physicians and physician groups that violated the Anti-Kickback Statute and Stark Law.
The Anti-Kickback Statute, among other things, prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid or other federally-funded programs. The Stark Law prohibits a hospital from profiting from patient referrals made by a physician with whom the hospital has an improper financial arrangement. Both the Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and are based solely on the best interests of the patient.
“The Justice Department is committed to investigating cases that threaten the integrity of the Medicare program,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “The department will continue to protect patients by pursuing federal health care providers that have improper financial relationships with referring physicians.”
“We are deeply satisfied with today’s settlement and encourage potential whistleblowers to come forward with evidence of wrongdoing affecting the Medicare program,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “We are committed to fighting fraud and abuse to help preserve scarce Medicare funds for those who need it the most, the sick and the elderly.”
Midtown Imaging was named as a defendant in a suit brought in 2009 by two former Midtown Imaging radiologists under the whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. The lawsuit alleged that Midtown Imaging entered into prohibited financial relationships with certain physicians and physician groups. Under the civil settlement announced today, the whistleblowers, Dr. Teresa M. Cortinas and Dr. Walter E. Wojcicki, will receive $600,000.
The case was handled by the U.S. Attorney’s Office for the Southern District of Florida and the Commercial Litigation Branch of the Justice Department’s Civil Division. The investigation was conducted by the Department of Health and Human Services (HHS) Office of Inspector General.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the HHS in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than $7.3 billion.