NEW YORK CITY, NEW YORK, November 17, 2016 – Zwanger-Pesiri Inc., a Long Island radiology company, is paying a total of $10.5 million to settle a whistleblower lawsuit filed by Phillips & Cohen LLP that alleged Medicare and Medicaid fraud and also settle related criminal charges.

The “qui tam” (whistleblower) lawsuit said that Zwanger-Pesiri performed radiology procedures that were not ordered by doctors and were medically unnecessary. Some of those procedures were particularly invasive, such as a transvaginal ultrasound.

In addition, 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 the healthcare programs and procedures that were performed at an unauthorized location.

“These defendants knowingly overbilled Medicaid by millions, draining the program of important resources meant to help some of our most vulnerable individuals,” said New York Attorney General Eric Schneiderman in a statement.

The whistleblowers in the case, Linda Gibb and Donna Geraci, were billing specialists at Zwanger-Pesiri. Their case was filed in 2013 in the Eastern District of New York.

The radiology company has agreed to pay $6.9 million to the federal government and $1.2 million to New York State to settle their qui tam lawsuit. In addition, Zwanger-Pesiri agreed to forfeit $2.4 million to the government. The company pleaded guilty to health care fraud in US District Court in Central Islip, New York, on Wednesday.

The company will enter into a corporate integrity agreement with the government to ensure oversight of its billing practices in the future.

The False Claims Act encourages whistleblowers to file qui tam lawsuits against entities that defraud the government and recover funds on taxpayers’ behalf. Whistleblowers are rewarded with 15 percent to 25 percent of the recoveries, if the government joins the case. New York and many other states have similar false claims laws that reward and protect whistleblowers.

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