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Press Release

William M. Kelly, M.D., Inc And Omega Imaging, Inc. Agree To Pay $5 Million To Resolve Alleged False Claims For Unsupervised And Unaccredited Radiology Services

For Immediate Release
Office of Public Affairs

William M. Kelly Inc. and Omega Imaging Inc., together, operate 11 radiology facilities in Southern California, have agreed to pay the United States $5 million to resolve allegations that they violated the False Claims Act (FCA) by knowingly submitting claims to Medicare and the military healthcare program, TRICARE, for unsupervised radiology services and services provided at unaccredited facilities, the Department of Justice announced today.

“Today’s settlement demonstrates the department’s unrelenting commitment to protect the public fisc and patient safety,” said Acting Assistant Attorney General Jeffrey Clark of the Department of Justice’s Civil Division.  “The department will aggressively pursue unscrupulous healthcare providers who cut corners that could jeopardize the health and safety of Medicare and TRICARE beneficiaries.” 

“Patients rightly expect that medical providers follow the proper procedures and protocol when administering complex treatments to ensure patient safety,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “Working with our law enforcement partners we remain steadfast in our commitment to uphold the integrity of government health programs.”

The settlement resolves allegations that the defendants submitted claims for CT scans and MRIs involving contrast injections that were not properly supervised by a physician.  Applicable program rules require a physician to be present in the office suite when a patient undergoes an examination that involves the administration of intravenous contrast material.  The defendants allegedly performed and billed for these procedures when no supervising physician was present in the office suite.  The settlement also resolves allegations that a certain number of the defendants’ facilities lacked accreditation.

Contemporaneous with the settlement, William M. Kelly, Inc. and Omega Imaging Inc. entered into a three-year Integrity Agreement (IA) with the Department of Health and Human Services Office of Inspector General requiring, among other things, the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks.  The IA requires training, auditing, and monitoring designed to address the conduct alleged in the case.

The settlement, which was based on the defendants’ ability to pay, resolves allegations originally brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the FCA by Syd Ackerman, who was formerly employed by the defendants.  The FCA permits private parties to sue on behalf of the government for false claims and to receive a share of any recovery.  The FCA permits the United States to intervene in such a lawsuit, as it did in part here.  Mr. Ackerman will receive approximately $925,000 of the settlement proceeds.

This settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch; the U.S. Attorney’s Office for the Central District of California; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; and the Defense Health Agency Office of General Counsel. The qui tam case is captioned United States ex rel. Syd Ackerman v. William M. Kelly, M.D., Inc. and Omega Imaging, Inc., No. EDCV 13-02195 JGB (DTBx) (C.D. Cal.). 

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Updated September 14, 2020

False Claims Act
Press Release Number: 20-900