New York radiology practice pays $15.5 million to settle whistleblower lawsuits

NEW YORK CITY, Feb. 25, 2014 -- A chain of medical radiology facilities has agreed to pay the federal government and the states of New York and New Jersey a total of $15.5 million to settle three whistleblower lawsuits - including one filed by Phillips & Cohen LLP - that alleged Medicare and Medicaid billing fraud.

The "qui tam" lawsuit filed by Phillips & Cohen alleged that Doshi Diagnostic Imaging Services P.C. and its parent company, Diagnostic Imaging Group LLC, billed Medicare and Medicaid for enhanced three-dimensional (3D) images when a patient had certain CT scans done - even though the enhanced 3D images weren't ordered by the patient's doctors, weren't medically necessary and often were never even taken.

The 3D tests are more detailed than the standard two-dimensional CT scans and typically are used to treat complex fractures, tumors in the lungs and cardiac issues where it is important to have a more detailed view of the affected area of the body.

The other two qui tam lawsuits alleged that Doshi billed Medicare and Medicaid for certain other diagnostic tests in addition to the 3D scans, including retroperitoneal ultrasounds and Doppler scans, and that Doshi paid kickbacks to certain physicians in exchange for referrals.

Doshi is headquartered in Hicksville, NY, and has facilities in New York and New Jersey. It is a subsidiary of Diagnostic Imaging Group, which is registered in Delaware.

The qui tam lawsuits were filed "under seal" in 2009 and 2010 in district courts in New Jersey and Brooklyn, New York. The cases were made public today after the court approved the settlement and unsealed the qui tam lawsuits.

Doshi and its parent company will pay $13.6 million to the federal government, $1.7 million to New York and $95,192 to New Jersey. Payments to the states are based on their share of the Medicaid recoveries.

Under the False Claims Act and similar state laws in New York and New Jersey, whistleblowers may sue companies and individuals that are defrauding the government and collect a reward based on the amount recovered. The three whistleblowers will share the whistleblower reward.

Phillips & Cohen attorneys said the team of government lawyers and investigators, working together from multiple jurisdictions, did an excellent job on this case.

They noted in particular the work of Arthur Di Dio, trial attorney with the Justice Department's Commercial Litigation Branch; Assistant US Attorney Paul Kaufman of the US Attorney's Office for the Eastern District of New York; Assistant US Attorney Charles Graybow of the US Attorney's Office for the District of New Jersey; Geri Gold, New York Special Assistant Attorney General; New Jersey Deputy Attorney General Michelle T. Weiner; and Robert K. DeConti, Assistant Inspector General for the US Dept. of Health and Human Services' Office of Inspector General.