Operators of Diagnostic Centers Agree to Pay $2.6 Million
to Settle Alleged False Claims Act Violations
Seattle Whistleblower and Qui Tam Attorneys report that two Houston-based diagnostic centers have agreed to pay the United States a total of more than $2.6 million to settle allegations that they violated the False Claims Act. The settlements were finalized without an admission of liability and without commencement of litigation. One group of centers, which operates under the name One Step Diagnostic and is owned and controlled by Fuad Rehman Cochinwala, has agreed to pay $1.2 million. The payment is being made to settle allegations that it violated the Stark Statute and the False Claims Act by entering into sham consulting and medical director agreements with physicians who referred patients to One Step Diagnostic Centers.
The other group of centers, which is owned and controlled by Rahul Dhawan, has agreed to pay $1,457,686. This group consists of Complete Imaging Solutions LLC doing business as Houston Diagnostics, Deerbrook Diagnostics & Imaging Center LLC, Elite Diagnostic Inc., Galleria MRI & Diagnostic LLC, Spring Imaging Center Inc. and West Houston MRI & Diagnostics LLC. The United States alleged that these centers engaged in improper financial relationships with referring physicians and improperly billed Medicare using the provider number of a physician who had not authorized them to do so and had not been involved in the provision of the services being billed.
“The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can alter a physician's judgment about the patient's true health care needs and drive up health care costs for everyone,” said Acting Assistant Attorney General Branda. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”
“These settlements totaling more than $2.6 million represent the continuing commitment of our office in combatting health care fraud,” said U.S. Attorney Magidson. “The U.S. takes these accusations seriously. Working within the whistleblower laws, we will continue to bring these cases to public view where tax payer money is being used improperly.”
The settlements announced today arose from a lawsuit filed by three whistleblowers under the qui tam provisions of the False Claims Act. Under that act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.
The case, United States ex rel. Holderith, et al. v. One Step Diagnostic, Inc., et al., Case No. 12-CV-2988 (S.D. Tex.), was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Texas and Department of Health and Human Services - Office of Inspector General. The claims settled by this agreement are allegations only, and there has been no determination of liability.
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The other group of centers, which is owned and controlled by Rahul Dhawan, has agreed to pay $1,457,686. This group consists of Complete Imaging Solutions LLC doing business as Houston Diagnostics, Deerbrook Diagnostics & Imaging Center LLC, Elite Diagnostic Inc., Galleria MRI & Diagnostic LLC, Spring Imaging Center Inc. and West Houston MRI & Diagnostics LLC. The United States alleged that these centers engaged in improper financial relationships with referring physicians and improperly billed Medicare using the provider number of a physician who had not authorized them to do so and had not been involved in the provision of the services being billed.
“The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can alter a physician's judgment about the patient's true health care needs and drive up health care costs for everyone,” said Acting Assistant Attorney General Branda. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”
“These settlements totaling more than $2.6 million represent the continuing commitment of our office in combatting health care fraud,” said U.S. Attorney Magidson. “The U.S. takes these accusations seriously. Working within the whistleblower laws, we will continue to bring these cases to public view where tax payer money is being used improperly.”
The settlements announced today arose from a lawsuit filed by three whistleblowers under the qui tam provisions of the False Claims Act. Under that act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.
The case, United States ex rel. Holderith, et al. v. One Step Diagnostic, Inc., et al., Case No. 12-CV-2988 (S.D. Tex.), was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Texas and Department of Health and Human Services - Office of Inspector General. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Sou