NY radiology firm to pay $8M in fraud settlement

New York radiology group Zwanger-Pesiri Radiology pleaded guilty on November 16 to Medicare and Medicaid fraud, agreeing to pay more than $8 million to settle an investigation that began more than two years ago with an FBI raid on the firm's offices in March 2014, according to the office of New York State Attorney General Eric Schneiderman.

Schneiderman and U.S. Attorney Robert Capers said on Wednesday that Zwanger and Pesiri Radiology Group, Zwanger Radiology, and Dr. Steven Mendelson will pay $8.2 million in civil damages to resolve allegations that they knowingly submitted false claims to Medicare and Medicaid for procedures not ordered by a physician. The firm will pay an additional $2.4 million in criminal restitution.

The settlement resolves allegations that between January 2003 and October 2015, the firm submitted claims for services provided or supervised by physicians who were not enrolled in Medicare or Medicaid and therefore were ineligible for payments. Schneiderman's office said in its statement that Zwanger falsely claimed that Mendelson had performed the procedures.

Wednesday's settlement also resolves allegations that between January 2008 and February 2014, Zwanger submitted false claims to Medicare and Medicaid for radiology procedures that were not ordered by a treating physician. The procedures included the automatic performance of certain types of x-rays, as well as the automatic performance of ultrasound scans in female patients, even though both procedures had not been ordered by a treating physician.

In addition to the agreed settlement, the firm was placed on two years' probation and has agreed to sign a corporate integrity agreement for oversight of its operations by the U.S. Department of Health and Human Services (HHS).

"Zwanger-Pesiri illegally pursued corporate profits at the expense of federal and state healthcare providers and taxpayers," Capers said. "Today's guilty plea and approximate $10.5 million global settlement demonstrates our vigilance in bringing to justice those who put profits first and healthcare second."

In a November 16 statement, Zwanger-Pesiri said it is pleased to put the investigation behind it.

The settlements represent a compromise of disputed claims, mostly related to the performance of transvaginal and transabdominal pelvic ultrasound when the referral slip requested a complete pelvic sonogram, Zwanger-Pesiri said, adding that the firm has admitted no wrongdoing.

"It is important that our patients know that these inquiries were never about the failure to perform billed services, nor did they concern the quality of our services, which continue to be the gold standard in radiological care," the company said.