Long Island Radiology Company, Zwanger-Pesiri Inc., Pleads Guilty To Federal Health Care Fraud Charges And Agrees To Pay $2.4 Million In Criminal Forfeiture
The Company Also Agrees to Pay Over $8.1 Million to Resolve Federal and State Civil Fraud Allegations
Earlier today, at the federal courthouse in Central Islip, New York, Zwanger-Pesiri Inc., a Long Island radiology company, pleaded guilty to two counts of health care fraud for illegally performing and billing for procedures that had not been ordered by treating physicians. After accepting the guilty plea, United States District Court Judge Joanna Seybert approved a settlement with the United States and the State of New York in which Zwanger-Pesiri agreed to forfeit $2.4 million in the criminal case and pay $8,153,727 million to resolve civil liability arising from its fraudulent practices.
The announcement was made by Robert L. Capers, U.S. Attorney for the Eastern District of New York, Scott J. Lampert, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and Eric Schneiderman, New York State Attorney General.
As part of the plea agreement and criminal settlement, Zwanger-Pesiri pled guilty to a criminal information charging the company with illegally engaging in schemes to fraudulently obtain reimbursements from Medicare and Medicaid by “bundling” the tests it performed, such that when a patient’s treating physician ordered one test to be performed, Zwanger-Pesiri would automatically perform a related but unordered test. For example, between July 2009 and February 2014, when patients were referred to Zwanger-Pesiri for either a dual energy X-ray absorptiometry (DXA) bone scan or a vertebral fracture assessment (LVA), Zwanger-Pesiri would perform both tests. Similarly, between January 2008 and February 2014, when female patients were referred to Zwanger-Pesiri for either a pelvic or transvaginal ultrasound, Zwanger-Pesiri would perform both tests.
As part of the civil settlement with the United States and State of New York, Zwanger Pesiri agreed to pay $6,921,490.80 to the United States and $1,232,236.20 to New York State to resolve allegations set forth in a qui tam complaint filed by Donna Geraci and Linda Gibb. Under federal and state False Claims Act statutes, a private individual who has uncovered fraud against the government may file a suit in federal court on behalf of the United States and the State of New York. If the United States and the State are successful in resolving those claims, the individual who filed the complaint may receive a share of the recovery. In addition to resolving civil liability arising from the conduct described in the criminal information, the civil settlement resolves allegations that Zwanger-Pesiri fraudulently billed Medicare and Medicaid programs for procedures performed or supervised by physicians who were not properly credentialed with Medicare and Medicaid programs, or which were performed at an unauthorized practice location.
Finally, as part of the global settlement, Zwanger-Pesiri agreed to enter into a Corporate Integrity Agreement with HHS-OIG that will govern its future conduct and ensure careful oversight of its billing practices.
“Zwanger-Pesiri illegally pursued corporate profits at the expense of federal and state health care providers and taxpayers. Today’s guilty plea and approximate $10.5 million global settlement demonstrates our vigilance in bringing to justice those who put profits first and health care second,” said United States Attorney Capers. Mr. Capers expressed his appreciation to HHS-OIG, the FBI, and the State of New York Attorney General’s Office.
“Zwanger-Pesiri, like all health care providers, must be held to a high standard of ethical behavior,” said Special Agent in Charge Lambert of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region. “Corporate greed must never be a part of medical decision making. HHS-OIG and our law enforcement partners are committed to protecting patient care, and the federally funded health care programs intended for the nation’s most vulnerable citizens.”
“This case reminds us of a growing epidemic that exploits private and public insurers and the people they insure. Health care fraud is often mistaken for a victimless crime, but it victimizes insurers directly and the insured and others indirectly. Those who employ these schemes will most certainly be brought to justice,” said FBI Assistant Director-in-Charge Sweeney.
“These defendants knowingly overbilled Medicaid by millions, draining the program of important resources meant to help some of our most vulnerable individuals,” said Attorney General Schneiderman. “I thank our partners in law enforcement for helping us protect New York taxpayer dollars against fraud and waste. We will continue to vigilantly guard the integrity of Medicaid, and will punish those who steal from our state.”
The federal criminal case was prosecuted by Assistant United States Attorney Lara Treinis Gatz, and its civil claims were litigated by Assistant United States Attorney Robert W. Schumacher. The State of New York’s civil claims were litigated by Carolyn T. Ellis, Chief, Civil Enforcement Division, Medicaid Fraud Control Unit, Office of the Attorney General.