The Department of Justice recently announced two large settlement agreements with provider organizations and individual physicians based on failure to provide proper physician  supervision for diagnostic imaging and radiation therapy procedures.

In the first settlement, announced on August 27, 2013, Imagimed, LLC, a New York based diagnostic testing company, and certain individuals formerly associated with the company agreed to pay the government $3.57 million to settle charges that, between 2001 and 2008, the company submitted false claims for MRI scans to Medicare, Medicaid and Tricare. 

Federal regulations require that MRI procedures involving contrast injections must be directly supervised by a qualified physician, so that care is immediately available in the event the patient experiences anaphylactic shock or other adverse side effects.  Imagimed failed to provide the appropriate physician supervision for MRI scans with contrast.

Less than three weeks later, on September 13, 2013, the Justice Department announced a similar settlement with a number of northwest Florida providers and physicians — Gulf Region Radiation Oncology Centers, Inc., Gulf Region Radiation Oncology MSO, LLC, Sacred Heart Health System, Inc., West Florida Medical Center Clinic, P.A., Emerald Coast Radiation Oncology Center LLC, and two individual physicians.  The parties agreed to pay $3.5 million to the federal government and the state of Florida to settle charges that they billed for radiation oncology services that were not properly supervised by a physician.  The government had strong evidence to support its case:  records indicated that between 2007 and 2011, when the improper billing occurred, the physicians were often away on vacation or were working at another facility at times they were supposed to be on-site supervising radiation oncology services.

These two settlements are examples of how important it is to comply with applicable federal requirements governing supervision of diagnostic imaging, radiation oncology, and other procedures, and how costly failure to comply with such requirements can be.

These settlements provide a sharp contrast to a court decision issued earlier this year, in which a federal appeals court reversed an $11.1 million verdict obtained by the Department of Justice against a provider of imaging services based on failure to provide proper physician supervision.  See, U.S. ex rel Hobbs v. Medquest Associates, Inc. (6th Dist., April 1, 2013).  The court held that the supervision regulations which Medquest violated were conditions of participation in the Medicare program, not conditions of payment, and thus did not warrant the remedy of recoupment under the False Claims Act, but, rather, were addressable by administrative sanctions, including expulsion from the Medicare program.  (This case was discussed in a Health Law Rx Blog posted April 9, 2013).


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