A national sales director for a New York-based mobile diagnostic company pleaded guilty on April 2, 2025, to conspiring to offer and pay kickbacks to doctors in exchange for ordering medically unnecessary brain scans.
From at least June 2013 through at least September 2020, the defendant conspired with others, including two managers at the mobile diagnostic company who were involved in the administration of transcranial Doppler (TCD) scans, to enter into kickback agreements with doctors. The defendant and his co-conspirators offered and paid doctors based on the number of TCD ultrasounds ordered. Some doctors were compensated in cash, while others were paid by check.
The conspirators created fraudulent rental and administrative service agreements, making it appear that doctors were paid for the use of space and administrative services at fair market value, rather than based on the volume of referrals. These agreements concealed the true nature of the arrangement, which was paying per test.
According to the charging documents, the scheme resulted in approximately $70.6 million in false Medicare claims.
The charge of conspiracy to violate the Anti-Kickback Statute carries a maximum sentence of five years in prison, three years of supervised release, and a fine of up to $250,000.
Compliance Perspective
Issue
All medical services billed to Medicare, Medicaid, or private insurance must be medically necessary, meaning the services are essential for diagnosing or treating an illness, injury, condition, disease, or its symptoms. Submitting claims for unnecessary services may violate the False Claims Act, leading to fines, criminal charges, and other sanctions. The Anti-Kickback Statute makes it illegal to offer, pay, solicit, or receive anything of value to induce or reward referrals for federal or state healthcare program business. This prohibition applies to both those offering and accepting kickbacks, which can take many forms, including bribes, rebates, or other benefits, whether in cash or kind. Failing to report a kickback promptly can result in severe legal consequences, including lawsuits, fines, and additional sanctions.
Discussion Points
- Review policies and procedures for medical testing services, focusing on billing practices and protocols for preventing false claims and violations of the Anti-Kickback Statute. Update if necessary.
- Ensure that appropriate staff members are trained to assess whether services provided to residents are medically necessary. All staff should also be trained on the Anti-Kickback Statute, including identifying what constitutes a kickback. Provide specific training on how to recognize and prevent false claims, especially related to unnecessary or inappropriate services that lack proper documentation. Ensure staff understand the importance of reporting concerns or suspected violations promptly.
- Audit to assess staff adherence to procedures for identifying and reporting unnecessary services or illegal kickbacks. Emphasize that reporting violations is essential, regardless of whether the actions were intentional or unintentional.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
