• AI
  • Molecular Imaging
  • CT
  • X-Ray
  • Ultrasound
  • MRI
  • Facility Management
  • Mammography

Attorney general joins MRI kickback scheme case


The Illinois attorney general’s decision Jan. 11 to join a case regarding alleged illegal kickbacks from imaging centers to referring physicians gives credibility to a lawsuit filed last year and kept under seal until now.

The Illinois attorney general's decision Jan. 11 to join a case regarding alleged illegal kickbacks from imaging centers to referring physicians gives credibility to a lawsuit filed last year and kept under seal until now.

John Donaldson, the owner of several imaging centers in Illinois, filed a lawsuit in February 2006 alleging that other area imaging centers were paying illegal kickbacks to referring physicians.

The Cook County Circuit Court maintained the complaint under seal until Attorney General Lisa Madigan's office investigated the allegations and decided to join the case.

If the defendants are found to have acted illegally, they could face fines of $5000 to $10,000 per each fraudulent claim, which could number in the hundreds. As the whistleblower, Donaldson is entitled to 30% of the money the government collects. Donaldson's attorney was not immediately available for comment.

The complaint alleges that more than a dozen open and advanced MRI facilities in Illinois entered into sham lease agreements with referring doctors under which the doctors would pay a reduced rate for MR scans but charge the patient's insurance company a higher rate and then keep the difference.

For example, the typical amount billed for an MR scan is $800. Under the alleged kickback scheme, the fee would be split $400 to the MRI center and $400 to the referring physician.

To hide the kickback scheme, according to the complaint, participants used a lease agreement, which purported that the referring physician is renting the defendant facilities to do the MR scans for patients. The physician's only activity, however, would be the referral of the patient.

"The purported lease agreement is a subterfuge, utilized to cloak and hide the kickback paid for the referral," the complaint said. "The fiction of the lease is shown by the fact the physician does not participate in doing the scans [and] has no involvement at the service center. . . ."

The lawsuit claims the defendants' actions violate the Consumer Fraud and Deceptive Business Practices Act, as well as Illinois' anti-kickback law, the Insurance Claims Fraud Prevention Act. It asks the court to order the defendants to stop paying the illegal kickbacks and seeks monetary damages, restitution, and penalties.

"Illinois has a clear policy against kickbacks, and making payments to doctors for referral of patients is illegal, no matter how those payments are disguised," Madigan said in a statement. "Our investigation revealed evidence showing that this practice occurs among doctors and radiology centers in Illinois. This is an illegal practice that must stop."

Dr. Leonard Berlin, president of the Illinois Radiological Society and radiology chair at Rush North Shore Medical Center, said that he has been approached several times in the last few years to enter into various lease arrangements with referring physicians.

"There are legal technicalities and there are moral standards," Berlin said. "Some will be proven to be legal, but will they pass the smell test?"

Last year, the Centers for Medicare and Medicaid Services proposed new rules to plug self-referral loopholes that allow physicians to perform imaging tests at a facility they lease full time. CMS has expressed concern that medical groups can bill Medicare for more than they pay outside contractors to run these facilities. The new rules would limit opportunities for groups to pay a lower fee and collect a higher one for diagnostic services.

The Massachusetts State Senate in 2006 began an investigation into unusual tactics to buy licenses to open MRI centers, according to a June 30, 2006 report in the Boston Globe. While it's nearly impossible to obtain a new license to open an MRI center, bidders are paying up to $300,000 for exemption letters issued in the early 1990s before the new license crackdown. The legislature also is investigating alleged kickback schemes and self-referral by physicians to facilities in which they have a financial interest.

For more information from the Diagnostic Imaging archives:

Dismissed U.K. whistleblower fires back

Whistleblower alleges Medicare fraud at Florida imaging centers

I just hate to hear that lonesome whistle blow

Utilization rules should target self-referral

Related Videos
Improving the Quality of Breast MRI Acquisition and Processing
Can Diffusion Microstructural Imaging Provide Insights into Long Covid Beyond Conventional MRI?
Emerging MRI and PET Research Reveals Link Between Visceral Abdominal Fat and Early Signs of Alzheimer’s Disease
Nina Kottler, MD, MS
Practical Insights on CT and MRI Neuroimaging and Reporting for Stroke Patients
Related Content
© 2024 MJH Life Sciences

All rights reserved.