Texas Medical Groups Agree to Settle False Claims Act Case for $2.3 Million

Children’s Physician Services of South Texas (“Physician”) in Corpus Christi, Texas and Radiology Associates (“Radiology”) have agreed to pay a combined total of $2.3 million to settle allegations that they violated the False Claim Act and the Texas Medicaid Fraud Act. Specifically, it was alleged by whistleblower Diana Kulwicki, a former revenue manager and coding compliance officer with Radiology Associates, that the firms double-billed the government for reading and interpreting ultrasound images.

Each ultrasound has a technical component (the actual taking of the ultrasound by a technician) and a professional component (the reading and interpretation of the image by a physician). According to the whistleblower complaint filed under the qui tam provisions of the False Claims Act, between 2002 and 2007, Physician and Radiology agreed that Physician would only bill Medicaid, TRICARE, and the Federal Employee Health Benefit Program for the technical component and Radiology would bill for the professional component.

The whistleblower alleged that Physician knowingly submitted invoices and received payment for both the technical and professional components without telling Radiology. According to the Complaint, when Radiology discovered the “double-billing,” they questioned Physician, but Physician denied it. According to the government, Radiology then turned a blind-eye and the double-billing by both companies continued.

The Department of Justice announced that the companies agreed to settle the False Claims Act allegations with Physician paying $1.5 million and Radiology paying $800,000. As her reward under the qui tam provisions of the False Claims Act, the whistleblower will receive a portion of the settlement amount.