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AG Schneiderman Announces $15.5m Settlement With NY Radiology Practice That Billed Medicaid And Medicare For Unnecessary Tests

Doshi Diagnostic Imaging Services, P.C., And Diagnostic Imaging Group, LLC, to Repay $2.9M for False New York Medicaid Billings; Settlement Involves Allegations of Kickbacks

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New York, NY - February 26, 2014 - Attorney General Eric T. Schneiderman today announced that New York, New Jersey and the United States have entered into a $15.5 million settlement agreement with Doshi Diagnostic Imaging Services, P.C., and Diagnostic Imaging Group, LLC, to resolve allegations that the radiology practice, which is headquartered on Long Island, submitted false claims to the Medicaid and Medicare programs for diagnostic outpatient imaging services that were not specifically ordered by a treating physician and not medically necessary. The agreement also resolves allegations that the companies engaged in a kickback scheme which violated federal and state laws. 
New York’s Medicaid recovery will be $2,915,217. That money will be returned to the state Medicaid program. Of the total funds, $12,394,399 million will be returned to the federal Medicare program, and New Jersey’s program will recover $190,384. 
“Fraud committed by medical practices costs New York taxpayers millions of dollars every year. My office will find those who cheat the system, cheat New York taxpayers and cheat our most vulnerable patients,” Attorney General Schneiderman said. “In addition to other fraud, these companies were suspected of paying kickbacks. This illegal behavior must – and will – stop.”
Doshi Diagnostic Imaging Services, P.C., is a radiology medical practice headquartered in Hicksville, NY, with 21 locations in New York City and Nassau County. Diagnostic Imaging Group, LLC, also headquartered in Hicksville, provides management and support services for the practice locations. 
As outlined in the settlement papers, in New York, between 1999 to 2010, the companies submitted false billings for expensive imaging services, included retroperitoneal ultrasounds, Doppler scans, transrectal ultrasounds and pelvic x-rays. In the case of 3D multiplanar reconstructions, claims were submitted to New York Medicaid for tests that were not medically necessary and that were not ordered and not even performed. The 3D imaging is often used in orthopedic, cardiovascular and neurologic imaging, including to visualize complex fractures, tumors in the lungs or soft tissues, and cardiac issues. More than 4o,000 false claims were submitted to the New York Medicaid program for the various imaging services.
The agreement resolves allegations that the radiology practice, in violation of the federal Anti-Kickback Statute and the Stark Physician Self-Referral Law and analogous New York state laws, submitted false claims for nuclear stress tests to New York Medicaid from October 5, 2001, to July 22, 2012, that were fraudulent because the radiology practice had service agreements with the referring physicians under which the physicians were paid more than fair market value for supervision of the nuclear stress tests.
Doshi Diagnostic Imaging Services, P.C., and Diagnostic Imaging Group, LLC, have entered into a Corporate Integrity Agreement with the Office of Inspector General of the United States Department of Health and Human Services. 
The settlement is based on three whistleblower lawsuits brought by private individuals in 2009 and 2010 pursuant to state and federal false claims acts filed in the U.S. District for New Jersey and the Eastern District of New York. 
Attorney General Schneiderman thanks the whistleblowers, the Department of Justice, the U.S. Attorneys Offices for the District of New Jersey and the Eastern District of New York and the Office of the New Jersey Attorney General for their assistance and cooperation throughout this investigation. 
The investigation was conducted by Special Auditor Investigator Tatum Serfilippi and Supervising Special Auditor Investigator Stacey Millis. 
This matter was handled by Special Assistant Attorney General Gerri Gold of the Medicaid Fraud Control Unit. The unit is overseen by Assistant Deputy Attorney General Paul J. Mahoney, MFCU Acting Director Amy Held and Executive Deputy Attorney General for Criminal Justice Kelly Donovan.