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$85M Settlement in False Claims Act Against Mobile Cardiac PET Scan Provider

January 3, 2024

A courageous insider stands to gain up to a $25 million False Claims Act whistleblower reward as a result of properly reporting alleged violations concerning kickbacks and self-dealing which constitute Medicare fraud and Medicaid fraud.  Whistleblower attorney Jason T. Brown commented, “The Department of Justice remains vigilant in prosecuting cases where there’s allegations of pay to play since inducements for Medicare treatments compromise the integrity of the system.”  In recent years billions of dollars have been recovered through the False Claims act and hundreds of millions of dollars have gone out as whistleblower awards for promptly filing actionable case.

What is the False Claims Act?

Fraud financially harms taxpayers and erodes trust and integrity in society. When fraud is committed against the government, the cooperation of insiders with relevant knowledge is needed to facilitate investigations by appropriate government agencies into investigating fraud. The False Claims Act (31 U.S.C. §§ 3729 – 3733), signed by President Abraham Lincoln on March 2, 1863, is one of the oldest laws designed to protect the government against fraud and is colloquially known as, “The Lincoln Law.”  It’s fitting that Honest Abe who has the reputation of integrity has a statute that endures and encourages people to do the right thing.  Under the False Claims Act, cases are filed confidentially, and exclusively through the use of a False Claims Act attorney.  The power of the False Claims Act is that it enables the taxpayers to recover triple the damages of the fraud and the whistleblowers are incentivizes to receive up to 30% of the recovery which is a strong economic reason to come forward.

Cardiac Imaging Inc. – A Mobile Cardiac PET Scan Provider

The case against Cardiac Imaging Inc. and its CEO under the False Claims Act involved allegations of unlawful inducements in the healthcare industry implicating the government funds of Medicare and Medicaid. Between March 1, 2014, and May 31, 2023, Cardiac Imaging Inc. allegedly made fraudulent claims to federal healthcare programs by paying kickbacks to cardiologists. These kickbacks were purportedly for supervising PET scans, which were significantly higher than the fair market value, sometimes exceeding $500 per hour, and in the form of fees, but in actuality were given to obtain Medicare and Medicaid patients allegedly. The payments included compensation for times when cardiologists were not present at Cardiac Imaging Inc.’s mobile scanning units or were attending to other patients. Cardiac Imaging Inc.’s actions were allegedly based on a flawed fair market value analysis, which the company knew contained inaccuracies regarding the services provided by the referring physicians and were greater than market value to induce the referral of patients

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$85 Million False Claims Act Settlement

As a consequence of Cardiac Imaging Inc. and its CEO’s actions, they were required to pay a  settlement amount of over $85 million for its alleged violations of the anti-kickback statute and physician self-referral laws pertaining to cardiologist fees for supervising PET scans. The settlement also led to a five-year Corporate Integrity Agreement (CIA) with the Health and Human Services Office of Inspector General (HHS-OIG), which required Cardiac Imaging Inc to implement measures that ensured compliance with both the Stark Law and AKS, and to also undergo regular reviews of their arrangements.  Under the terms of the False Claims Act whistleblower mechanism the insider who disclosed the information is entitled to a whistleblower award up to $25 million.

The Relationship of the Anti-Kickback Statute and Stark Law to the False Claims Act

Violations of the False Claims include individuals or organizations knowingly submitting, or causing the submission of false claims or false statements pertinent to false claims sent to the government. In the case against Cardiac Imaging Inc., physician “kickbacks” were allegedly paid under the guise of supervision fees subsequently leading to false claims submitted to federal health programs due to the underlying illegal payments. When a provider engages in kickbacks or self-referrals, any claims submitted to federal health care programs linked to these prohibited actions are considered false or fraudulent. These claims are tainted by a illegal kickback or self-referral, making them ineligible for reimbursement under federal health care program standards. Thus, when providers submit claims to Medicare or Medicaid arising from services or referrals that violate the Anti-Kickback Statute (42 U.S.C. § 1320a-7b) or Stark Law (42 U.S.C. § 1395nn), they are effectively submitting false claims, triggering liability under the False Claims Act.

The Courageous Whistleblower Who Brought The Qui Tam Action

With millions of claims involving the government every day, the government is forced to rely upon heroic insiders with relevant knowledge to unmask the actions of perpetrators defrauding the government. These individuals are known as “whistleblowers” and they can bring a lawsuit on behalf of the government using the False Claims Act known as a “qui tam action”. A qui tam action refers to an action brought on behalf of the government as well as oneself.  Since the plaintiff in a False Claims Act case is relating the case of the government through their own information they are also referred to as a relator.

In the case of Cardiac Imaging Inc., the relator was a former billing manager at the company, who served as the whistleblower. The relator’s actions in bringing the qui tam case include, but are not limited to the steps  shown below. It is integral when handling a case along these lines to hire one of the best whistleblower law firms as it’s a highly focused field and individuals are encouraged to speak with qui tam law firms who have former Department of Justice lawyers and/or FBI lawyers and the firms that have a track record of success in this space.

Qui Tam Suit is Filed: The relator initiated the lawsuit by filing a complaint confidentially under seal with a whistleblower law firm against Cardiac Imaging Inc., alleging fraudulent billing in to Medicare and Medicaid by virtue (or vice) of kickbacks.

Under Seal and Government Investigation: After the qui tam law firm filed her lawsuit, it remained under seal for a period of time. This confidentiality allowed the government to conduct a thorough investigation without alerting the defendants. During this phase, the relator provided vital information and evidence to support her claims, playing a crucial role in guiding the government’s investigation.

Department of Justice Decided to Intervene: The government, upon reviewing the evidence presented in the relator’s complaint and its own investigation, has to make a strategic decision whether or not to get involved. In this case, the Department of Justice (DOJ) found the relator’s allegations credible and significant enough to warrant its direct involvement.

Negotiations and Settlement: The government’s prospective intervention led to negotiations with Cardiac Imaging Inc., culminating in the $85 million settlement.

Whistleblower’s Reward: As part of the resolution under the False Claims Act, the relator is entitled to a portion of the recovered funds as a whistleblower award. This reward not only recognizes the whistleblower’s crucial role in uncovering fraud, but also incentivizes others to come forward with information about potential wrongdoing against the government. The exact amount of the relator’s share is undisclosed, but would be determined on the basis of several factors, including her contribution to the case and could be as high as 30% which would be $25 million

The relator’s action exemplifies the critical role whistleblowers play in exposing and addressing fraud against the government. The courage to come forward and the subsequent legal proceedings utilizing a False Claims Act law firm underscore the effectiveness of the qui tam provisions in the False Claims Act as a tool to combat fraud and protect public funds. With an estimated hundred billion dollars a year plus fraud against the government, there’s billions in possible whistleblower rewards for individuals who blow the whistle the right way, but only for the first to file, so insiders are encouraged to speak with an accomplished whistleblower law firm promptly to learn their rights.