Department of Justice Seal




(202) 514-2007


TDD (202) 514-1888



WASHINGTON, D.C. - More than seventy medical centers and billing companies have agreed to pay the United States almost $10 million to settle allegations that they submitted false claims for reimbursement to federally-funded health care insurance programs, the Justice Department announced today.

Today's settlement resolves allegations that from January 1, 1992 through June 30, 1996, the defendants submitted claims to Medicare and the Department of Defense TRICARE program for patient services that were not provided or ordered by a physician, not medically necessary, or for which the medical services were billed to obtain a higher reimbursement. The settlement also resolves allegations that from January 1998 to April 1999, the defendants fraudulently transferred assets to avoid having to repay the United States.

"The settlement is an example of the government's determination to ensure that the United States is compensated for conduct by physicians, medical centers and billing companies that defrauds Medicare and TRICARE," said Assistant Attorney General, David W. Ogden of the Justice Department's Civil Division.

The settling defendants, including Dr. Douglas Colkitt, who either owns, directs or controls the medical centers and billing companies, provided radiation oncology services to cancer patients in Pennsylvania, Maryland, New Jersey, New York, North Carolina, Ohio, Arizona, Illinois and Florida, or were in the business of billing for those services. Additional individual and corporate defendants who have also agreed to settle the government's allegations are paying money or waiving claims to assets that may assist the United States in collecting the full $9.885 million judgment. Allegations remain unresolved with respect to one company, EquiMed and a number of its subsidiaries.

"Those health care providers that would defraud the United States by submitting false or fraudulent claims should expect the government to fight that fraud by seeking damages and penalties under the False Claims Act or under other civil or criminal statutes," said Lynne A. Battaglia, United States Attorney for Maryland.

The charges initially were brought under the qui tam or whistleblower provisions of the False Claims Act (FCA) by a doctor, Syed Rahman, who provided radiation oncology services for one of the defendants. Under the qui tam provisions of FCA, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendants. The United States intervened in the lawsuit and filed its complaint in 1998. Dr. Rahman will receive 17.5% of any settlement payments that the U.S. recovers.

The case was investigated by the Office of Inspector General of the United States Department of Health and Human Services (Columbia, MD office) and the Defense Criminal Investigative Service of the United States Department of Defense (Baltimore, MD office). The case has been litigated jointly by the Civil Division of the United States Department of Justice, the United States Attorney's Offices for the District of Maryland and the Southern District of Florida, and with the assistance of the Department of Health and Human Services Office of Inspector General.