An Illinois-based mobile imaging provider and its CEO will pay $85 million to settle allegations that they used illegal referrals to bilk the Medicare program, the Department of Justice announced Tuesday.
The kickback scheme spanned over nine years ending in May 2023. Cardiac Imaging Inc. would purportedly pay cardiologists $500 or more per hour to supervise positron emission tomography scans for patients whom they had referred to the company. However, these fees “substantially exceeded fair market value,” often including time when the referrers were not on site during the exams.
Cardiac Imaging also allegedly compensated cardiologists for other services beyond supervision that were not actually provided. The firm relied on a consultant’s compensation estimates to reach these amounts, even though it allegedly knew the information was “premised on fundamental inaccuracies” about the services provided by referrers.
“Paying illegal kickbacks to cardiologists so they refer patients undermines the integrity of federal healthcare programs and needlessly increases costs,” U.S. Attorney Alamdar Hamdani for the Southern District of Texas, said in an Oct. 10 DOJ announcement. “Patients deserve care based on their medical need and not on a doctor or company’s financial interest or gain.”
Under terms of the settlement, Cardiac Imaging has agreed to pay $75 million, plus additional amounts based on future revenues. CEO and Florida resident Sam Kancherlapalli—who oversaw and approved the alleged kickback arrangements—will pay another $10.48 million, with both amounts based on their ability to pay. The United States has a claim against the company of nearly $657 million, less any amounts received under the agreement, according to the original complaint. Both Cardiac Imaging and Kancherlapalli also have entered into a five-year corporate integrity agreement with the HHS Office of the Inspector General. The pact requires them to implement measures to ensure that referral arrangements do not violate the Anti-Kickback Statute or Physician Self-Referral Law. This includes conducting annual risk assessments and retaining an independent entity to perform regular reviews.
Whistleblower Lynda Pinto, a former billing manager at Cardiac Imaging, first surfaced the claims. She stands to collect a “not yet determined” amount from the settlement.
The claims are allegations only and there has been no determination of liability, the DOJ emphasized. Cardiac Imaging Inc., based in Oakbrook Terrace, Illinois, denied the charges on Tuesday while noting that it fully cooperated with the investigation and remains in business.
“We are pleased to reach the resolution announced today, and CII will continue to service patients across the nation with our fixed and mobile solutions, including our supervision program,” CEO Sam Kancherlapalli said in a statement. “CII remains deeply committed to providing patients with the leading cardiac care, and we’re excited to continue to drive our mission forward.”
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.