False claims case highlights risky payment arrangements

Details of a False Claims Act complaint filed against the former co-owner of a mobile cardiac PET scan operation are a reminder for providers to avoid financial conflicts with respect to the Physician Self-Referral Law, known as the Stark Law.

The claims against Florida resident Rick Nassenstein, formerly the president of Illinois-based Cardiac Imaging, highlight the problem of improper financial arrangements between healthcare providers and referring physicians, according to the U.S. District Court for the Southern District of Texas, where the case was filed.

In a news release, the U.S. Department of Justice (DOJ) said Cardiac Imaging paid exorbitant, above-fair-market value fees to the doctors who referred patients for cardiac PET scans and alleged the arrangements were in violation of the Stark Law.

"... the cardiologists were paid as if they were fully occupied supervising CII’s scans, even though the cardiologists were actually providing care to other patients in their offices or were not even onsite," according to the complaint, which also alleged the company compensated the cardiologists for additional services beyond supervision, that were not actually provided.

According to the court document, as part of its arrangement with referring physicians, Cardiac Imaging paid physicians a fee of at least $500 per hour, "what physicians actually did was remain available in the event of an emergency -- akin to an 'on-call' arrangement common in medicine." Some doctors were paid $8,000 per day, according to the complaint, and Cardiac Imaging allegedly paid over $40 million in illegal fees from 2017 to June 2023.

The Stark Law prohibits a medical diagnostic services provider like Cardiac Imaging from billing Medicare for certain designated health services referred by a physician with whom the provider has a financial relationship, including a compensation arrangement, that does not meet any statutory or regulatory exception. Claims knowingly submitted to Medicare in violation of the Stark Law also violate the federal False Claims Act, according to the DOJ.

In October 2023, the Justice Department reached an $85.4 million settlement in the same case, against the mobile PET imaging company's founder, owner, and CEO Sam Kancherlapalli, also a resident of Florida.

Page 1 of 112
Next Page