Mont. hospital pays $10M to settle radiology lawsuit

Bozeman Health Deaconess Hospital in Montana paid $10 million in November 2018 to settle a federal lawsuit that charged the hospital with fraud connected to its provision of radiology services, according to a report in the Bozeman Daily Chronicle.

First filed under the False Claims Act almost three years ago, the lawsuit claimed that the hospital devised a kickback scheme to maintain control over radiology services in Gallatin County, according to the newspaper. The hospital's alleged scheme involved entering a joint venture with Intercity Radiology, which considered opening its own outpatient imaging center in the city of Bozeman, offering lower prices and expedited services in a more convenient location.

Bozeman Health convinced Intercity Radiology to abandon this project in favor of opening a joint venture, known as Advanced Medical Imaging, at the hospital, according to the lawsuit. The hospital planned to refer patients to Advanced Medical Imaging for CT, MRI, and women's diagnostic imaging exams, with the intention of receiving payment for the referrals, according to the Bozeman Daily Chronicle. The radiology group warned the hospital that these actions would violate the federal antikickback statute.

Hospital attorneys have denied all of the allegations and any wrongdoing, arguing that Intercity Radiology never revealed its intentions to open its own center.

The hospital has agreed to pay the U.S. government $7.5 million, 28% of which will go to former Bozeman radiologists Dr. Frank Rembert and Dr. Michael Paradise, the two individuals who initiated the lawsuit, according to the newspaper. The other $2.5 million will go to the firm representing Rembert and Paradise. This is the third lawsuit the radiologists filed against the hospital since they were fired in 2011.

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