Two Houston-based diagnostic groups have agreed to pay the government $2.6 million to settle allegations that they had improper financial relationships with physicians and violated the False Claims Act.
Three whistle-blowers and Kenneth Magidson, U.S. Attorney for the Southern District of Texas, filed suit Oct. 4, 2012, against One Step Diagnostic centers and a group of six other Texas diagnostic centers as well as several physicians and podiatrists. Investigators alleged One Step Diagnostic and the doctors entered into sham consulting and medical director agreements that resulted in the unlawful referring of patients to One Step Diagnostic centers. The second group of diagnostic centers had inappropriate financial relationships with referring physicians and improperly billed Medicare using an unauthorized provider number the Justice Department said.
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As part of the settlement, One Step Diagnostic will pay $1.2 million to the government.
Employee whistle-blowers claimed staff were instructed to deliver checks to physicians and podiatrists involved in medical consultant and medical director agreements with the centers. The money was to be accompanied by a set of medical records that doctors would review as part of the agreement, according to court documents. However, employees claimed, on many occasions they delivered the checks without medical records. Investigators said the contracts were an attempt to disguise illegal kickbacks to doctors in exchange for referrals.
As part of the settlement, One Step Diagnostic will pay $1.2 million to the government, while the other group of centers agreed to pay about $1.5 million, according to an Oct. 17 statement from the U.S. Department of Justice. The U.S. Attorney for the Southern District of Texas does not plan to continue the False Claims Act lawsuit against the named physicians and podiatrists. However, the Office of Counsel to the Inspector General retains the right to seek civil monetary penalties against the health providers.
The diagnostic centers acknowledged no wrongdoing in the case, said Anna Grizzle, a Nashville-based attorney who represented the second group of diagnostic centers.
“Our clients did deny liability in the matter,” Ms. Grizzle said in an interview. “However, they fully cooperated with the government and took appropriate steps to resolve the matter.”
The Justice Department noted the settlements were finalized without an admission of liability by both groups of diagnostic centers.
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