Medical Imaging Group Settles in Whistleblowers’ Case

Diagnostic Imaging Group (“DIG”) will pay a total of $15.5 million to resolve allegations made by whistleblowers in three qui tam lawsuits that it violated the False Claims Act and the Anti-Kickback Statute. DIG operates a change of diagnostic testing facilities through its New York-based subsidiary Doshi Diagnostic Imaging Services. It formerly operated through additional subsidiaries Doshi Diagnostic Imaging Services of New Jersey and Florida-based Signet Diagnostic Imaging Services.

According to the Department of Justice, the settlement resolves separate qui tam cases filed by three different whistleblowers – New York radiologist Mark Novick, M.D., Rey Solano a medical supply company representative, and Richard Steinman, M.D., a radiologist in Florida. The whistleblowers alleged that DIG knowingly submitted claims to Medicare and the New Jersey and New York Medicaid programs for 3D reconstructions of CT scans that were never performed or interpreted, in violation of the False Claims Act. The government also claims that DIG bundled certain diagnostic tests on its order forms, so that when a physician ordered a test, the patient received all of the tests bundled with it, including ones that were medically unnecessary.

In addition to the allegations that DIG, through its chain of diagnostic facilities, violated the False Claims Act, the government alleged that DIG violated the Anti-Kickback Statute by paying kickbacks to doctors in order to reward them for the referral of patients for diagnostic services. According to the government, DIG purportedly made payments to doctors seemingly to supervise patients who underwent nuclear stress testing, but the amounts of the payments exceeded fair market value.

DIG has agreed to pay a total of $15.5 million to resolve the allegations. Of that, $13.65 million will be paid to the federal government, with the remaining $1.85 million to be shared by the states of New York and New Jersey Medicaid programs.

The three whistleblowers will share in a percentage of the settlement proceeds as their rewards under the qui tam provisions of the False Claims Act. Dr. Novick will receive $1.5 million, Dr. Steinman will receive $209,250, and Mr. Solano will receive $1.07 million.

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