Radiologist pays $7 million to settle federal fraud claims

Apr 13, 2008

A Florida radiologist has paid the U.S. government $7 million to settle allegations of healthcare fraud. The U.S. had charged the radiologist with defrauding federal healthcare programs by billing for CT scans that were never performed, paying other physicians for patient referrals, and ordering imaging exams that were medically unnecessary.

The Department of Justice announced today that Dr. Fred Steinberg paid the amount to settle various claims involving imaging centers he owned and operated in Palm Beach County, including University MRI (UMRI) of Boca Raton, West Boca Open MRI, and other entities.

The government charged UMRI facilities with not performing portions of CT scans, even though the procedures were billed and reported to the patients' physicians as if they were done. For example, UMRI facilities submitted bills to Medicare and other federal healthcare agencies for thousands of CT scans with and without contrast, when in actuality the CT scans without contrast were not performed, the government claimed.

In addition, the UMRI facilities performed CT and ultrasound scans "that were not ordered by physicians and were not medically necessary," the government said.

Finally, the government claimed that Steinberg's businesses paid financial inducements to physicians for patient referrals, a violation of the Stark and antikickback laws. The inducements "took the form of medical directorship, clinical research, employment, facility use, and equipment lease agreements that exceeded fair market value or otherwise failed to comply with federal law," the government said.

The Department of Justice became involved in the case after joining a civil "whistleblower" lawsuit filed by Dr. David Clayman, a neuroradiologist who claims he was fired from UMRI in 2002 -- after nearly three years of employment -- when he confronted Steinberg about his coding practices.

Under the U.S. False Claims Act, private individuals can bring whistleblower actions for fraud on behalf of the U.S., and collect a share of any proceeds recovered by the suits. Clayman will receive $1.75 million as his share of the proceeds from the settlement, the government said.

"Billing Medicare for tests that are either not medically necessary or not performed is an abuse of the Medicare program that squanders scarce Medicare dollars," said U.S. Attorney Alexander Acosta. "We will aggressively prosecute any physicians, including board-certified specialists, who abuse and steal from the Medicare system to line their own pockets."

In a statement, UMRI pointed out that it did not intentionally violate any federal healthcare law or regulation, and that the business was never charged or convicted of any crime. In addition, the U.S. government has not restricted any of the UMRI facilities from enrolling patients from Medicare or other federal healthcare entities.

The statement went on to say that medical imaging services are governed by complex federal laws and government regulations that are often changing, and that the agreements noted by the government were commonly used in the U.S.

"The consulting and clinical research agreements noted by the government were terminated six years ago, prior to the government's investigation. The coding and billing issues noted by the government were remedied many years ago," the statement said.

By Brian Casey
AuntMinnie.com staff writer
April 14, 2008