DOJ Settles Medicare Fraud Case – Whistleblowers Seek More

The Department of Justice (DOJ) has settled a False Claims Act case against Minnesota based Center for Diagnostic Imaging which accused the company of Medicare fraud.  The radiologic imaging company has agreed to pay the U.S. government $1.2 million to settle part of the allegations in the lawsuit that related to Medicare billing procedures.  The DOJ alleged that the company “upcoded” the procedures it billed to Medicare, billing procedures as if they were different, more expensive procedures.

Upcoding was just part of the overall case against the company, however, and the whistleblowers in the case claim that the settlement is only about one third what it should be.  The DOJ only intervened on the billing aspect of the case, and the settlement only resolves those issues.  The whistleblowers – Seattle doctor Alexander Serra and former company vice president Patricia West claim that in addition to the upcoding, the company participated in a kickback scheme where it paid health care providers for referrals.  Also, according to the whistleblowers, the company violated federal law by performing orders for exams without written doctor’s orders, and retaliated against Ms. West after she complained about the illegal practices.  While the DOJ has not intervened in these aspects of the case, it will monitor the case closely as it progresses.


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