East Texas Imaging Companies and Owners Resolve Swapping and Medicare Fraud Allegations
PLANO, Texas – Multiple mobile imaging companies, along with their owners Dennis Whitsell and Jonathan Graham Lane, will pay the United States $300,000 after improperly billing Medicare for transportation charges related to portable x-ray services, announced Acting United States Attorney Brit Featherston. One of the companies also entered into a deferred prosecution agreement with the United States to resolve swapping allegations, which implicated the Anti-Kickback Statute.
“The United States Attorney’s Office for the Eastern District of Texas keeps a watchful eye on the use of public funds,” said Acting U.S. Attorney Featherston. “When a provider fails to comply with Medicare or Medicaid program rules, taxpayers expect to be repaid.”
In March 2011, Relators Kevin P. McDonough and Boyd K. Billington filed a lawsuit under the qui tam provisions of the False Claims Act. Relators filed their suit in the Eastern District of Texas in an action captioned United States ex rel. McDonough, et al. v. PDQ Imaging Services, LLC, et al., Case Number 4:11-cv-00138. In their action, Relators alleged, among other things, that the defendants improperly billed for portable x-ray services and unlawfully paid kickbacks to skilled nursing facilities (SNFs) in exchange for patient referrals, an arrangement Relators referred to as “swapping.”
The United States intervened in the action for purposes of settlement. Defendants PDQ Imaging Services, LLC, PDQ Ultrasound Services, LLC, PDQ Mobile X-Ray Services, PDQ Mobile X-Ray, LLC, Dennis Whitsell, and Jonathan Graham Lane (together, “Defendants”) agreed to pay the United States $300,000 to resolve allegations that they submitted improper claims to the Medicare program for transportation charges and entered into an agreed judgment in favor of the United States.
The False Claims Act permits a private citizen (called a “relator”) with knowledge of fraud against the Government to bring a lawsuit on behalf of the United States and to share in the recovery. Under the settlement announced today, Relators will receive a 19% share of the United States’ recovery.
The United States also undertook a criminal investigation regarding the allegations of improper remuneration paid by PDQ Imaging Services, LLC (PDQ) in exchange for referrals from a number of SNFs. The criminal investigation revealed that from in or around January 2008, and continuing through in or around March 2012, PDQ offered and paid illegal remunerations, in the form of free and significantly discounted portable x-ray services, to administrators of SNFs in exchange for the referral of the SNF’s Medicare beneficiaries to PDQ for the purpose of furnishing portable x-ray services. The free and significantly discounted portable x-ray services were services covered by the SNF’s Part A per diem payment and were provided to the SNFs in exchange for the SNF referring to PDQ other Federal health care program business, namely Part B business excluded from consolidated billing, that PDQ could bill directly to Medicare.
To resolve the matter, PDQ entered into a deferred prosecution agreement with the United States in an action captioned United States v. PDQ Imaging Services, LLC, Case Number 4:17-CR-199, wherein PDQ acknowledged that the arrangements entered into between PDQ and the SNFs violated the Anti-Kickback Statute and amounted to unlawful “swapping” arrangements. As part of the agreement, PDQ agreed to cooperate with the government in the investigation and prosecution of the SNFs and individuals involved in the illegal swapping arrangements and to maintain internal controls, including compliance with the Anti-Kickback Statute, and all other applicable federal health care laws.
This matter was investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), and the United States Attorney’s Office for the Eastern District of Texas. The civil settlement was negotiated by Assistant U.S. Attorney Joshua Russ. Assistant U.S. Attorneys Nathaniel Kummerfeld and L. Frank Coan, Jr. prosecuted the criminal case for the United States.