TV sting nets radiologists and imaging centers

February 24, 1993

A network news program aired this month uncovered what could bethe next front in the battle over medical fraud and abuse: workers'compensation fraud. As pressure builds to control the nation'shealth-care budget, imaging professionals have been caught

A network news program aired this month uncovered what could bethe next front in the battle over medical fraud and abuse: workers'compensation fraud. As pressure builds to control the nation'shealth-care budget, imaging professionals have been caught onceagain with their fingers in the payment cookie jar. Workers' compfraud differs from imaging center self-referral abuse, however,in that both radiology practices and imaging centers are in aposition to corrupt this system.

A team of reporters from the ABC-TV program Prime Time Liveconducted a six-month investigation of fraud in the Californiaworkers' compensation system. What they found was enough to lighta fire under any state legislator: health-care professionals,including radiologists, participating in a variety of scams tobilk the state's workers' comp system.

Prime Time Live reporters set up a dummy medical clinic inthe Los Angeles area to attract and refer workers' comp patients.But the clinic also attracted a swarm of shady medical practitioners.Among the would-be scammers were several imaging center professionals,one of whom offered illegal $140 kickbacks for each workers' compMRI referral.

"We don't have a problem paying for the referral,"said the owner of one imaging center, Reliable Diagnostic Imaging,who was caught by the hidden cameras.

One radiologist contacted by the dummy clinic was leery ofpaying direct kickbacks for MRI referrals. He instead offeredto let the clinic bill its insurance carrier and pocket the moneyfor four of every 10 referrals it sent him--even though the dummyfirm had no MRI scanner.

It was not that radiologist's first appearance on Prime TimeLive. He was also seen last year during a report on mammography(SCAN 4/22/92), in which he failed to detect several lesions ona mammogram sent to him for interpretation.

Were the examples on Prime Time Live simply isolated cases,or is workers' comp fraud the imaging center industry's dirtylittle secret?

"You've got an expensive piece of equipment. You needpatients for it. It's tempting," said Robert Achermann, executivedirector of the California Radiological Society.

But the vast majority of radiologists do not knowingly participatein workers' comp fraud, Achermann said. One difference betweenradiologists and other medical professionals in the workers' compsystem is that most radiologists don't base their practices onworkers' comp referrals.

But even legitimate imaging centers participate in practicesthat, while not illegal, contribute to the rapidly increasingcosts of California's workers' comp system. One of these practicesis the use of so-called scan brokers--companies that act as middlemenbetween imaging centers and insurance companies. In many casesscan brokers receive huge mark-ups on workers' comp cases butprovide minimal services. Some scan brokers bill insurance companiesfor services that were never provided.

Why do radiologists and centers deal with such companies?

"Lots don't, some do," said Achermann. "Theywould have a hard time discerning (fraudulent) companies fromreal ones."

American Health Services, a Los Angeles-area mobile imagingcompany, discovered how difficult it is to separate the bad applesfrom the good. One of the firm's vans appeared on the Prime TimeLive broadcast, parked outside an imaging center identified byreporters as a fraudulent operation. American Health, however,had no association with the imaging center other than rentingthe imaging van, according to Larry Atkins, president and CEO.

"It was like someone using a Hertz rental car in a bankrobbery," Atkins told SCAN. "The only association wehad was that our truck was there. We were not the operator ofthe truck, nor were we responsible for the patients."

Law enforcement officials interviewed by Prime Time Live saidthey would investigate the abuses the show uncovered. The programcould also add fuel to the drive to reform the state's workers'comp system, which had a reputation for fraud even before theprogram aired.

"Hopefully, this (program) will illustrate the extensivenature of the problem," said Richard Stephens of the CaliforniaDepartment of Industrial Relations, the state agency that overseesthe workers' comp system.

Legislation is being drafted that would curb many workers'comp abuses, such as scan brokering, Stephens said. Legislationmight also be introduced to limit the number of exams per patientand tighten up patient referrals within the system.

Also under way is an effort to revise the workers' comp feeschedule, which has not been updated in over a decade (SCAN 2/10/93).As a result, recent technologies such as MRI are not in the system'sfee schedule, despite the fact that MRI is a major contributorto the system's rising costs.

"It's a system outside the norm of medicine," Achermannsaid. "Things that you don't find in regular medicine occurin workers' comp. It seems blatant, but it hasn't been stopped."