Uncategorized
Aug 03

Whistleblower alleges Medicare fraud at Florida imaging centers

A Florida radiologist has been named as a defendant in a whistleblower lawsuit alleging Medicare fraud though improper lease arrangements, kickbacks, and upcoding.

The lawsuit was brought against Dr. Fred L. Steinberg, a radiologist who operates three MR imaging facilities in the Boca Raton area by Dr. David A.

Clayman, a neuroradiologist who alleges he was terminated the same day he confronted Steinberg about coding standards at the practice. Clayman worked for Steinberg from October 1999 until July 2002.

http://www.diagnosticimaging.com/showNews.jhtml?articleID=166400790

Also, here is some information from the Florida Attorney General’s office regarding MRI brokering:

The brokering of certain diagnostic tests creates another opportunity for unscrupulous medical professionals to profit from these tests. MRI or Magnetic Resonance Imaging tests have long been used by the medical establishment and have a long history of benefits to patients. Because of a glut of MRI facilities in many populated areas of this state, the price of MRIs has come down over the years. Taking advantage of the excess capacities of MRI facilities, some unscrupulous individuals have formed what they call MRI brokerage businesses. What these businesses do is negotiate a deal with an MRI facility or multiple MRI facilities to perform MRI tests, for a price of roughly $350-$450. The MRI broker will then bill out these same tests to an insurance company for as much as $1,700. They do so by indicating in the billing documents that the broker is actually the facility administering the test, sometimes going so far as cutting and pasting documents, removing the letterhead from the real MRI facility and substituting their own.

Because there is no fee schedule set by the government in PIP claims, and because of the strict rules regarding PIP claims, as discussed below, insurance companies must pay almost any amount billed. For example, a lumbar MRI scan would typically be billed on average at $1,700 to a PIP insurer.

Medicare, however, would only pay $592 for that same test, a workers compensation carrier would only pay $546, and a typical preferred patient plan would on average pay $653.

MRI brokers provide no real service other than scheduling an appointment which any doctor’s office can do, or for that matter for which any patient can do on their own. Even MRI brokers who testified before us readily admitted that a patient could take their prescription for an MRI to any facility, just as that same patient could take a drug prescription to any pharmacy. Given that they are providing absolutely no benefit to the process, MRI brokers must somehow induce a doctor or chiropractor to refer their patients to them. All too often that inducement is in the form of a kickback. Typically an MRI broker involved in paying kickbacks will pay $200.00 for each patient referred.

At least one court has taken notice of this MRI brokering practice. In the case of Nuwave Diagnostics, Inc. vs. State Farm Mutual Automobile Insurance Company, Broward County Circuit Case No. 97-09174, the court disallowed two charges of $1,500 for MRI scans billed by the Plaintiff, an MRI broker. The facts in that case, as recited in the court’s opinion, were that the broker contracted with an MRI facility to pay $400 per scan. The broker would then refer patients to the facility which would perform the MRI scans.

Thereafter, the broker would bill the insured’s PIP carrier $1,500 for each scan. The Court rejected, as a legal fiction, the broker’s claim that it had provided the MRI services. The Court further found that the brokering activity outlined in that case constituted a clear violation of F.S. §817.505. The court concluded that the $1,100 markup charged by the broker was nothing more than a kickback.

Some unethical MRI diagnostic centers pay doctors and chiropractors the kickback directly rather than through a broker. In either scenario, medical professionals who accept this kickback are in no position to exercise independent professional judgment in the ordering of these exams. Nor are their patients, unaware of the kickback scheme, able to give informed consent to such tests.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →